Will closing cc accounts help?

Bailey101

Evening all

I realise there probably won't be a straight forward answer to this, but hopefully someone more knowledgeable could give me some pointers.

I have the following credit cards-

2x rbs each with £1000 limits
1x tesco card with £850 limit
1x Barclays initial with £800 limit
1x vanquis with £3000 limit
1x capital one with £1000 limit

All are used regularly, but paid in full each month.

I have no defaults, ccjs etc but there is one late payment mark on my credit file from march 2012.

Ideally I would like to close the vanquis, cap1 and Barclays cards and keep the mainstream ones running. My questions are -

1. If I close these 3 accounts, will this improve the chances of the other lenders increasing the limits on their cards?
2. Which would look more attractive to a mortgage lender, a lower amount of available revolving credit, or a better balance to limit ratio?

Thanks for any help or pointers you can give me!

Xx

izools

As you pay your cards in full each month I wouldn't worry too much about your balance to limit ratio; all you need to do is put less of your monthly expenditure on your credit cards each month to keep it low.

You will look better to a prospective mortgage lender having less credit available to you, especially if your debt to limit ratio is sensible.

geekonthepc

1. Depends on the circumstances, but in general yes. I would look at ditching the "sub-prime" cards such as the Initial and the Capital One. Vanquis obviously have high rates but that higher limit could work in your favour. Do bear in mind that lenders will always consider your income too - it's not always about how much credit you have available - it's also about how much you can handle with you income.

2. Again, everyone's circumstances are different. A mortgage lender will be more concerned about how well you are managing your finances rather than your credit usage ratio. Your late payment marker will probably be considered a minor hiccup and shouldn't be of too much concern. As long as your accounts are otherwise well managed, most average mortgage companies will be OK.

planteria

Bailey101 wrote: »

Ideally I would like to close the vanquis, cap1 and Barclays cards and keep the mainstream ones running.

are Tesco more 'mainstream' than Barclays? i would, generally, develop a 'relationship' with Barclaycard ahead of any of those others, and would get an Amex card for spending and build up a history with MBNA, if & when you want any other cards.

planteria

i would look to close some, as limits are low. key thing is which cards offer you the best benefits. do any of them pay you cashback on your spending??