Unused bank account - should I close it?

iclayt

Hello, quick question.

I have finally paid off an overdraft with Halifax (*hallelujah chorus*) and I'm wondering if there is any point leaving the account open, or more importantly any benefits to leaving it open/closing it in terms of credit ratings etc.

No DDs or anything from it - for years the only transactions on it have been monthly OD fees and my lump contributions to eventually pay it off. It is now £50 in credit with no further fees to be taken. My salary goes into a Natwest account and I have another Halifax account for bills etc.

Should I just take my remaining £50 and leave the account sitting there? Will it be a hassle to close it?

Thank you!

RoxRoxBling

Just walk into branch one sunny afternoon and close it
It will show up on your credit information/rating.
It depends how you feel bout having a account you're never gonna use

iclayt

RoxRoxBling wrote: »

It will show up on your credit information/rating.

In a good or bad way? Is it better to leave a non overdrawn account open or is closing it negative in any way?

RoxRoxBling

If you close it it'll come off your file after 6 years.
Either way it would just show up on your file as satisfactory. It would also show how much you've used of your overdraft. E.g. 0 if you haven't use overdraft.
Its not really negative thing, but would depend on how your future lenders would see it.

The amount of overdraft would make a difference.

Personally I'd close it. Cause I can't be dealing with empty unused accounts.

dr_adidas01

RoxRoxBling wrote: »

Personally I'd close it. Cause I can't be dealing with empty unused accounts.

So just because you can't deal with empty unused accounts the OP shouldn't to?

Personally I'd leave it open if I were you as long as its in credit and no further charges are to be made. You could if you wish get rid of the overdraft on the account.

I have a Barclays account that is little used but because I have had it for nearly 20 years it looks good to lenders and shows stability.

RoxRoxBling

dr_adidas01 wrote: »

So just because you can't deal with empty unused accounts the OP shouldn't to?

WELL.. ACTUALLY, I'm not forcing OP to do anything, as the title suggests the OP is asking for opinions. If they didn't wanna be told opinions they wouldn't have posted on a forum

dr_adidas01 wrote: »

Personally I'd leave it open if I were you as long as its in credit and no further charges are to be made. You could if you wish get rid of the overdraft on the account.

If OP leaves the overdraft on their account for the sake of their credit file, it shows they're a low risk as they're not using all their available credit.

anna42hmr

There are definatly two ways at looking at this, on the one hand it can make it easier to apply for a new product if you already have an account with them - for instance, I always find it quicker if there is a savings account etc I want to open if I already have an existing relationship with them for example if they allow applications via internet banking log in etc, and usually don't have any issues being identified.

On the other hand if you have accounts that are unused at a lot of places can be more hassle if you need to change information ie addresses, name change upon marriage etc as it is more companies you need to notify etc. Also if you leave a small amount in and the account goes dormant through none usage, would have to go through the dormancy process on death.

If it is an account with a bank I may have dealings with in the future, I sometimes keep it open, otherwise I just close it.

iclayt

Thanks for opinions everyone! I think I will take the £50 credit out of it to leave it at £0, and perhaps reduce the available overdraft on it, from £2000 to say £500 for now. Good plan?

Tantalus86

If you're going to keep it open, I would get rid of the overdraft altogether. Access to too much credit doesn't look great on a credit rating (and as you're not going to use it anyway there's no point in having it).

CLAPTON

best to consider what the advantages and disadvantages of current a/cs are.
to some extent it depends upon what sort of life you lead.
but to me multiple a/cs have some benefits

1. banks seem to make a habit of making major mistakes that mean you can't acess your a/c e.g. RBS/Natwest, Nationwide, HSBC ATMs and I'm sure there are more.

2. debit cards are sometimes randomly refused especially if you travel abroad so having a couple of backups is very handy

3. opening new products (say a ISA or saving a/c) is a lot easier if you are an existing customer

the main drawbacks is simply the need to keep an eye on them
personally I want them to look used so they don't go dormant so I recycle money between them each month; this does require a little organisation.

Also the issue of credit rating : personally I don't think there is much evidence that having an a/c with an unused OD makes any difference; all my three a/cs have largish OD limits (all unused) and it has no adverse effect on my ability to get new products.
And I value the security of having a reasonably OD just in case I need it in an emergency (especially when abroad)

iclayt

I do have another current account with Halifax already, which is always in credit and I've had it years. This now repaid OD was a second Halifax account I've had from student days and always struggled to repay.

My salary goes into a Natwest current account (with no overdraft available) and I transfer small amounts to the first Halifax one (with £500 OD available) for the bills and DDs that have always been set up on it. So I do have positive activity on two accounts with two different banks, and one source of OD credit available still with Halifax if I need it...

I think I will keep it open for a spare account if I need one but reduce the overdraft available, if only to stop myself from ever being so overdrawn ever again!

Thank you for your help!