Bit of advice needed

SeduLOUs

I'm in debt recovery and am currently snowballing my credit cards.

One of my worst cards will be paid off next month and I intend to close it. I currently have Vanquis, Aqua, Barclaycard and Capital One cards - all the bad ones.

I intend to pay ff and close down two, and only ever keep two cards in future, hopefully replacing these crap ones with two decent (or at least 'better' ones that have some benefit other than just being a line of credit).

I got declined a while ago for a Tesco Clubcard Credit Card, and I would be rejected again if I applied today, but these cards would be useful to me because of the additional clubcard points etc and the rates look good compared to what I have.

They have now released a foundation card, which is another crap rate card but with clubcard points. I don't really want the crap card, there's no point closing one crap card for another.

Do you think that opening one of the crap Tesco cards would improve my chances of getting one of the better cards in the future? Or would it simply go off credit score so I might as well just wait until I can get a better one outright?

I am hoping the logic applies that by keeping my rubbish Capital One and Barclaycards in check, it will improve my chance of getting decent cards from those companies quicker than just relying on my credit file, but perhaps it's just wishful thinking.

thebritishbloke

Building an internal score with a lender is key to getting better cards with them. Opening up the foundation Tesco card might mean that in 6-12 months time, they'll offer you one of their normal cards.

I wouldn't say credit cards are ever really 'crap', so long as you pay it in full every month they're very useful. Lets say I want to buy something, but my pay day isn't for a month. It covers that short period of time (so long as you know you can definitely pay it off in full).

Lenders can't see who your credit card is with, or what rate you have. All they can see is your credit limit, balance and payment history.

I'd just get your cards paid off, only keep one or two open. Once you've paid off your debt, then give it a go applying for another card.

Have you tried applying for the BarclayCard 0% BT cards? I know a couple of people with pretty bad credit who've been accepted for them recently.

mikey_l

I agree that building up a good history with a lender helps improve chances of further lending. You've got nothing to lose by applying, one search won't really hurt anything, especially if you're not planing on applying for anything else in the next couple of months.

SeduLOUs

Thanks for the advice. I think I'll apply then, use the card for all of my Tesco purchases for maximum clubcard points, and pay off in full each month to avoid the horrific interest rate.

I was just wondering if I should wait until one of my other cards is paid and closed? Is 5 cards at one time too many? Or are limits and available balances more important?

I'm currently utilising about 80% of my available credit, which is mostly low limits across multiple cards. I know that isn't good, but I'm trying to work towards 60% utilisation of 2-3 high(er) limit cards. Does that seem sensible?

Also thanks for the advice re Barclaycard 0% balance transfers. Perhaps that would be more useful to me in my current situation instead of the Tesco one and could help me close down the two worst cards (Aqua and Vanquis) first...

I hate this credit file guessing game!

mikey_l

Well it also depends on how much you earn in relation to how much credit you've got available.

If they're all low limits then closing one (or not) shouldn't really make too much of a difference. But I'd probably wait until you've got that 80% utilisation down a bit before closing one.

SeduLOUs

My credit file is pretty shot because of a default at the moment, so that won't fall off for another 18 months. But I'd like to be heading in the right direction so that once that falls off everything else is looking good.

I haven't missed a payment in 3+ years and by the time the default falls off I should have managed to clear most, if not all of my cards.

But I know that non-utilisation can be seen as being as bad as 100% so I'm just trying to find the right balance.

SeduLOUs

Just applied for the Barclaycard 0% but didn't get an immediate response. That's promising I guess, as at least it wasn't an immediate no.

Not getting my hopes up but it suggests things are moving the right direction if they are at least considering it. Putting the Tesco idea on hold for now, if I get refused for the Barclaycard I'll probably apply for that one in a couple of months.

Thanks for the advice guys.

thebritishbloke

SeduLOUs wrote: »

Just applied for the Barclaycard 0% but didn't get an immediate response. That's promising I guess, as at least it wasn't an immediate no.

Not getting my hopes up but it suggests things are moving the right direction if they are at least considering it. Putting the Tesco idea on hold for now, if I get refused for the Barclaycard I'll probably apply for that one in a couple of months.

Thanks for the advice guys.

I think this is a better idea, you already have 5 cards, getting a sixth just for the rewards isn't a very good idea, as it'll make you want to spend more money.

If you get approved for the BarclayCard, fantastic! Transfer your highest interest debt across and get to paying it off. Once your debt is paid off, then you can look at improving it. I don't think you'd really get any rewards card with a default.

SeduLOUs

thebritishbloke wrote: »

I think this is a better idea, you already have 5 cards, getting a sixth just for the rewards isn't a very good idea, as it'll make you want to spend more money.

If you get approved for the BarclayCard, fantastic! Transfer your highest interest debt across and get to paying it off. Once your debt is paid off, then you can look at improving it. I don't think you'd really get any rewards card with a default.

Thanks. I have 4 cards (and am applying for the 5th). I'm not applying to Tesco if I get the barclaycard, but may apply for it in a few months if Barclaycard rejects.

I know I am unlikely to get approved for normal 'rewards' cards but the Tesco one is a foundation card aimed at people with poor credit history, which is why it got on my radar.

It never crossed my mind that a decent BT might be an option with my history, but I've had a Barclaycard Initial now for just over 12 months and have always stayed under limit and made payemnts on time. Hopefully the Barclaycard will come through, allowing me to close two cards (and then I will have a total of 3 cards) and then I can work on clearing them down and saving myself a LOT of interest. :beer:

thebritishbloke

SeduLOUs wrote: »

Thanks. I have 4 cards (and am applying for the 5th). I'm not applying to Tesco if I get the barclaycard, but may apply for it in a few months if Barclaycard rejects.

I know I am unlikely to get approved for normal 'rewards' cards but the Tesco one is a foundation card aimed at people with poor credit history, which is why it got on my radar.

It never crossed my mind that a decent BT might be an option with my history, but I've had a Barclaycard Initial now for just over 12 months and have always stayed under limit and made payemnts on time. Hopefully the Barclaycard will come through, allowing me to close two cards (and then I will have a total of 3 cards) and then I can work on clearing them down and saving myself a LOT of interest. :beer:

Just an FYI, you can't transfer the debt from your BarclayCard Initial to your 0% BarclayCard, you'd have to transfer it elsewhere and then transfer it back. It'll cost you a little bit in transfer fees, but save you a lot in the long run.