To Close or Not to Close

gazzer82

Hello Experts,

Looking for some advice, i went through a period of pretty poor credit after having some defaults/late payments.

So, i used the Aqua/Vanquish cards to slowly build up my rating, and am now happily on some much better cards, with better rates/interest free periods e.t.c

So, i do not need the Aqua/Vanquis cards any more, but an unsure whether to cancel them or not, i currently have a relatively large amount of money going through my BA AMEX (paid off each month) to get a free companion flight offer, so my balance sometimes looks quite high on my report. Therefore i don't want to cancel the others and make my available balance/credit ratio look bad?

That said, when i login to credit expert (i know it's not a proper indication) it is currently complaining that i have a high number of credit accounts, which to be fair is kinda true.

Just wondering what to do!

Thanks

Gareth

jakesuk

To answer your question we need to know more about your circumstances (ie. salary, available credit, used credit, details of any missed payments etc etc etc).

Broadly speaking though I would be inclined to maintain some old accounts which are well maintained so it may not be prudent to close the old accounts just now, or close the newer of the two.

Don't worry about Credit Expert's flag, they won't be offering you any credit facilities anytime soon.

[Deleted User]

Get rid of the Vanquis and Aqua - they've done their job and now all they are doing is increasing your available credit. I guess you could keep the Aqua for fee-free foreign spending.

If you have the Amex card (do you have the basic or premium plus BA card?) then your finances are probably pretty healthy and it's time to start benefiting from your cards.

Depending on how long you have had the BA Amex for (more than 4 months and you should be ok) why not apply for the Amex Gold charge card? It's fee free for the first year and if you up £3k through it in the first 3 months you will get a load (at least 23,000) of Amex MR points (can be converted to Avios to use with your companion voucher). Nothing to stop you cancelling the card before your anniversary to avoid the fee next year.

The Amex Gold is a very good deal just now and since you already have a relationship with them you will probably get it - especially if you are using your BA card a lot. You get a higher sign up bonus if referred (drop me aPM if you want a referral! :-) )

Oh and for future reference - always keep at least one Amex account open. They backdate all new accounts to the year you opened your first.

gazzer82

I think you're right, i have other older credit accounts so i don't think closing those two will matter from that perspective.

I am full time employed, on £54,500 per year, currently renting but looking at getting a mortgage/buying in the next 12 months.

Card wise, i do have quite a lot, not that i use them that much:

Amex Gold - Always pain in full
Barclaycard - £849 of £3100
BA Amex - Usually paid in full, but about £1900 of £5500 - flights on currently (Honeymoon!!) - But will be paid off in the next month or two.
Capitol One - £0 of £1400
Nationwide Visa - £0 of £3500
MBNA AA - £0 of £10,900
Aqua - £0 of £2500
Vanquis - £0 of £3000

Other Debt - Lloyds TSB Refinance Loan (quite old) - £4393 remaining

Late payments wise, the only ones that are still on my record are:

3 payments late on a Vodafone bill when i moved home - very annoying but entirely my own fault - From October 2007

1 Payment late on a Lloyds TSB Credit Card in November 2007

I do indeed have the BA Premium card, only £500 away from the voucher threshold thanks to work expenses

I do also have the Amex Gold Card, for that exact reason, properly racking up the Avios. I have been offered the platinum on several occasions by AMEX but i'm not sure it's worth the cost, though i am tempted to take it, spend the £3K ASAP to get all the bonus points then cancel for a pro-rata discount on the membebrship fee.

Not far off two free (apart from taxes) business class flight to San Francisco

Any advice based on the above greatly appreciated!

Cheers

Gareth

gazzer82

Another question actually, if you don't mind!

I have been contemplating using the O% offer on my AA credit card to pay off my Loan.

Currently i have an interest free offer which lasts until July next year, which i can transfer cash to my bank account with. But it has a 4% fee, given that about £20-30 of the £196 i am paying a month seems to be going in interest it seems worth doing?

Any advice, i guess i need to do the maths, but i do find the interest rates a bit of a tax on the gold grey matter!

[Deleted User]

Check the offer - if you have the same MBNA AA deal as I do (the one where they recently offered 35,000 bonus miles) then I'm pretty certain that the 0% is only for six months from account opening, not a year.

If you're not in a rush for the points I'd hold out on the Amex platinum card as, historically, the bonus has been higher at around 50,000 MR points. Wait for that and it pretty much covers the £450 fee anyway. You will, however, keep most of the benefits (hotel status, cathay pacific (can use with BA) lounge access etc) for the whole year even if you cancel.

Also remember that you won't get a sign up bonus at all if you have had a MR card (in your case the Gold card) in the last six months. You would have to cancel your Gold, wait six months and then reapply for the Plat.

If I were you (I like milking travel bonuses) I'd ditch your current Barclaycard and then maybe think about applying for their Hilton Visa (1 free night at any Hilton worldwide for only £750 spend - could be worth £300 if used wisely) or the Priority Club (now IHG Rewards) visa if you stay at Holiday Inn, Intercontinental, Crown Plaza much.

I'd probably also loose the capital one and nationwide but that's just me. I don't like to spend anything on cards that don't benefit me. One other card you could think of is the Amex SPG card - £75 annual fee (can be refunded pro-rata) but the welcome bonus is 20,000 starpoints (for starwoods hotels) for only a £1000 spend in three months. These can be used for a few free hotel nights or 25,000 avios. Doesn't matter if you have any other Amex cards for this one. Once again (!) I can refer if you like (think you get an extra 1,000 or maybe 2,000 star points).

[Deleted User]

Oh, and I doubt your defaults will matter much anymore. If Amex have given you a Gold and BA PP card then I'd say you're in the clear. I'd wait for them to drop off before any mortgage application though, just in case.

jakesuk

gazzer82 wrote: »

Another question actually, if you don't mind!

I have been contemplating using the O% offer on my AA credit card to pay off my Loan.

Depends on the interest rate on the loan and depends on whether you could repay the AA card in full before July next year. Would likely work out cheaper to do the money transfer as you suggest provided you will pay off in full during the 0% period.

Given that you are going on honeymoon at some point are you sure you can repay before July?

jakesuk

gazzer82 wrote: »

I think you're right, i have other older credit accounts so i don't think closing those two will matter from that perspective.

Agreed. I would close the Vanquis and Capital One cards.

Eventually I would also close some of the other cards too if they offer little or no rewards for spending on them and replace them with better cards.

gazzer82 wrote: »

Card wise, i do have quite a lot, not that i use them that much:

You have a fairly high number of cards like me but having many cards has never stopped me getting more cards.

You may want to consider spending a small amount on each card every month (and repaying in full) to keep them ticking over with clean 0's on your credit file. Without the monthly spend this won't always happen as they may show up with the code for unused cards.

gazzer82

Ok, decision made, Aqua and Vanquis are to go, will close the other too over the next couple of months and look into some of the other cards you mentioned. I do very much like getting something for nothing

On the paying off the loan front, everything apart from the flights is all paid for and saved for, so happy i could get it paid off by next July. My interest free period was due to expire buy they sent me through a new offer a couple of week ago with the new 12 month deal. Problem is i'm not sure what the interest rate on the loan is, it's quite old now and i can't find the paperwork for it, guess i could give them a call and ask. Though as it was a refinance loan i would imagine they took the opportunity to stick me on a rather high one!

If it helps, original terms of the loan where:

£14,340.89 - Over 84 Months @ £219?

Really appreciate the advise!

Thanks!

Gareth