Balance Transfer credit card not needed?

Bat-Man

Hello,

I recently applied for a Tesco 0% balance transfer credit card with a view to transferring my existing balance of £5,300 over to it.

Unfortunately, after my application was successful, the limit of the card was only £2,800.

In an attempt to get a card with a higher limit, the following day I applied for a Barclaycard and was successful again! This time the limit was a more respectable £7,000 and can obviously handle the whole £5,300 amount.

My question is, even though the Barclaycard will serve its purpose, would there be any benefit in holding onto the Tesco card or should I just cancel the agreement? I don't necessarily need the £2,800 credit limit on the card but if by holding onto it I could improve my credit score some way, I would keep it.

From a credit score point of view, would it be a good idea to use the Tesco card for purchases (instead of my debit card) and to pay off the balance every month and to exclusively use the Barclaycard for the balance transfer?

If I did cancel the Tesco agreement (possibly the most sensible decision), does this impact my credit score in any way?

Thank you!

antonymp

Any application for Credit will impact your "Credit Score"
If I were you and as you already have the card I'd spend on it instead of your Debit Card then pay it off by the payment date, that way you'll improve your Credit Rating as well.

fozmcfc

Barclaycard are known to accept people, then reject them after further checks, or even when a customer tries to register/activate the card. There has been several threads on these forums about it, including a couple of recent ones.

Until you get the Barclaycard in your hand and register/active it and balance transfer to it and even see the amount balance transferred on a statement, I wouldn't be getting rid of the Tesco card.

You could be a candicate for having the card cancelled, as when you applied for it, the intital check, wouldn't have taken into account that you had just been given a further £2,800 of credit to your name, very recently.

onerickylambert

Hello,

Here's what I'd do. Assuming you got the 30 month 0% Barclaycard BT deal with 2.79% (or 31 month at 2.89%) transfer fee then this is cheaper than Tesco so BT to the Barclaycard.

Keep the Tesco card as it has 18 months interest free purchases (and clubcard points if you shop there, meaning free groceries). Do your regular day to day spending on Tesco and pay the minimum for the first 17 months and move what you would have paid on the full balance to an interest bearing savings account.

Keep your other credit card open and available for emergencies (car breakdown, boiler repair, etc)


Having available credit, and using it, helps your credit rating, so even spending £5/month on the Tesco card will boost your rating and keep your 'credit utilisation' lower (the amount of borrowing compared to your total credit on all cards).


While you're at it why not switch your bank account to Santander or Halifax - both give £100 to switch which will cover around 75% of the balance transfer fee (plus Halifax pay £5 a month if not overdrawn, covering the whole BT fee in 11 months combined with the £100 switch)

:money:

Bat-Man

Sounds like very good advice. Thank you all for your detailed replies