Over £70K credit available to us-close 0 balance cards?

plzhelpmesave!

Hi

I'm really getting to grips with finances this year and determined to clear our debts.

We want to move house within the next 18-24 months and would love to buy a project house or take on a property development.


Have just paid off £4k and cleared 2 barclay cards. We have a total of 10 cards between us. His credit limits on all cards are around £50k in total :eek: and mine are £20K:eek:

Right now, we have £24k on cards and a £15k loan we are paying back - no late payments, defaults etc and both with good credit history. All our credit card debt is at 0%.

So given we have about £35K available to us in credit - what would you guys advise doing? Close down cards and lower available credit? Give stoozing a go? (DH is very anti risk kinda guy!!)

Or leave as it is and just keep paying off the debt...

Thanks in advance for your guidance :money:

DesG

1st off, how can you be anti risk and have 39K in unsecured debt, what would happen if one or both lost their jobs!

70K of available credit (plus loan) is probably on the high side if you are looking at a mortgage. Although it may be fine depending on affordability etc etc.

Will you need any of the cards with zero balances to do 0% BT's in the future, that may be a decider on keeping them while you are clearing the balances.

Outstanding balances are much more important than available credit if applying for credit I think.

Do any of your cards have fee-free overseas usage, then they are keepers

Any of them have high cash back rates, again they are keepers.

Any particular reward points you are saving, etc.

Get a list of your zero balance cards and work out which ones do nothing for you and I would think about closing them. (Unless you need to do a 0% BT on any of them in the future)

Cheers, Des.

plzhelpmesave!

Thanks Des....good point about anti risk!! Never looked at it that way....thanks for that persprective! Just been so used to having credit cards and as they've been on 0% and weve always tarted, thought it was 'ok' as we were not paying interest and could pay back somehow!!

None of the cards are overseas, cashback or rewards cards-all bog standard normal cards!! Think ill close a couple of cards and then apply for a cashback card and pay off in full monthly.....

jamesml

Personally I would be hesitant about closing the cards. At the moment between the 2 of you, you have utilised about 35% of available credit (in respect of the cards) or 46% if you included the loan (although I don't think lenders would look at it like that). As soon as you start closing cards that is going to rocket.

Having said that, if you think that there is a risk you will keep spending etc and the only way to stop this is to close the cards, then do it. If you don't have any trouble controlling your spending I'd question the logic. If you have had these cards for a while and are clearing balances, this probably looks better to a lender than suddenly being on the high utilisation side of things.

I'd also suggest asking this question on the mortgage board, there are a number of brokers who might be able to offer a view on the potential impact of closing/not closing on a potential mortgage.

dotdash79

We don't know what your income is so advising you can be tricky. But it might be worth seeing which card providers might give you repeat offers and keeping them.

iAMaLONDONER

plzhelpmesave! wrote: »

Hi

I'm really getting to grips with finances this year and determined to clear our debts.

We want to move house within the next 18-24 months and would love to buy a project house or take on a property development.


Have just paid off £4k and cleared 2 barclay cards. We have a total of 10 cards between us. His credit limits on all cards are around £50k in total :eek: and mine are £20K:eek:

Right now, we have £24k on cards and a £15k loan we are paying back - no late payments, defaults etc and both with good credit history. All our credit card debt is at 0%.

So given we have about £35K available to us in credit - what would you guys advise doing? Close down cards and lower available credit? Give stoozing a go? (DH is very anti risk kinda guy!!)

Or leave as it is and just keep paying off the debt...

Thanks in advance for your guidance :money:

Pay off cards then close them

plzhelpmesave!

Thanks for the replies. Jamesml your comment made sense and was where my thinking was going.....

Our cc hasn't been frivolous stuff but day to day and family stuff while i was a sahm and hubby on low wages. We don't use cards on day to day but just for tarting

bigadaj

plzhelpmesave! wrote: »

Thanks for the replies. Jamesml your comment made sense and was where my thinking was going.....

Our cc hasn't been frivolous stuff but day to day and family stuff while i was a sahm and hubby on low wages. We don't use cards on day to day but just for tarting

In some ways that's a little more worrying than if it was wasted. As wasting money can generally be stopped and the money freed up used to rapidly pay down debt. Debt will have to be repaid at some point and there's no guarantee that interest free cards will are available generally or to you specifically so formulating a plan for repayment would be wise.

sniperpenguin

I would looking to clear the debt off, then possibly keeping it to one side to stooze against mortgage interest in the future.....

jamesml

iAMaLONDONER wrote: »

Pay off cards then close them

Why? They are tarting the balance. What benefit does closing the cards bring them? If anything having and using balance proves to a future lender that they can be a responsible borrower. What happens if they get the mortgage and then need some short term credit - no one will touch them, and then they'll be down the creek without a paddle thanks to advice like yours.

plzhelpmesave!

bigadaj wrote: »

In some ways that's a little more worrying than if it was wasted. As wasting money can generally be stopped and the money freed up used to rapidly pay down debt. Debt will have to be repaid at some point and there's no guarantee that interest free cards will are available generally or to you specifically so formulating a plan for repayment would be wise.

Yep totally agree! This year is debt repayment big time as we are now both bringing in money every money, budgetting, cut backs etc and increased income - debt is GOING down this year as much as possible!