Pay off (or close?) other cards before applying for Halifax Clarity?

rileydog

I would like a Halifax Clarity card to use for a long trip abroad and want to give myself the best chance of being accepted with a decent limit so was hoping for advice on whether to pay off / close accounts.

I currently have five credit cards with credit limits totalling approx £13,500 which is 48% of my gross income.

1) 17% - 4.9k limit - maxed out 0%
2) 8% - 2.2k limit - maxed out 0%
3) 6% - 1.8k limit - used as day to day spending and paid in full
4) 8% - 2k limit - rarely used
5) 9% - 2.6k limit - rarely used

The cards with credit limits of 4.9k (17%) and 2.2k (8%) are 0% purchase cards and are maxed out with the money sat in a saving account to repay in full when the 0% offers expire.

So in total I have around 7.1k outstanding on the two 0% cards, which is 25% of my gross income, and the total credit available to me is 48% of my gross income.

My question is... should I pay off the 0% cards early to have a better chance of being accepted ie to have zero debt or should I close one or more of the unused cards. This would mean I would have a lower % of credit available to me compared to my gross income, but would also increase my debt/credit limit ratio.

Eg if I closed the rarely used 2k and 2.6k cards I would be left with credit limits totalling 31% of my gross income (9k) but would have 7.1k outstanding on the 0% cards meaning I would be using 79% of my available credit limit, which I think makes it look like I might be struggling.

If I pay off the 0% cards early I would still have credit limits totalling 48% of my gross income but would have zero debt outstanding, other than the day to day soending on card number 3.

Any thoughts?

bigadaj

There's no hard and fast rule.

Sometimes available credit of 50% income is quoted, and 50% utilisation of Available credit but that's just a guess really.

How long have you got on the snoozed cards, if it's a short time if be tempted to pay off and close a couple of cards down.

Remember to leave plenty if time to get the clarity card, think mine took nearly a month, and if you do clear debt and close cards then leave extra time for that to be updated on teh credit reference files.

rileydog

bigadaj wrote: »

There's no hard and fast rule.

Sometimes available credit of 50% income is quoted, and 50% utilisation of Available credit but that's just a guess really.

How long have you got on the snoozed cards, if it's a short time if be tempted to pay off and close a couple of cards down.

Remember to leave plenty if time to get the clarity card, think mine took nearly a month, and if you do clear debt and close cards then leave extra time for that to be updated on teh credit reference files.

Thanks, I'm pretty much at the avail credit being 50% of my income already so sounds like closing at least one of the unused cards might help.

One stoozed card (2.2k) only has 3 months left on 0% so I may as well pay that one off early. The 4.9k one has over a year left to run.

So does closing one of the unused (card number 4 with 2k limit) AND paying off card number 2 (2.2k at 0%) sound like a plan?

That would take me to avail credit of 11.5k (40% of my gross income) and of that 11.5k available credit I'd be utilising 4.9k (card 1 @ 0%) - that equates to 42% of my available credit.

Timing wise I'm leaving two months for the cards to be closed down/paid off and a month to apply so hopefully should work out (if I get it!).

giblet10

I have about £60k credit available across ten card providers - this is about 100% of my income.

I utilise up to 10% of my available credit at any one time.

Last month I applied for the Clarity Card - it got referred to an underwriter and two days later I got confirmation the account had been approved with an £8k limit.

As said, the card took a while, and that's my general experience with the Halifax as my new debit card took ages to arrive as well.

System

Does your day to day card (3) have points or something making it worth keeping?

Otherwise, I would be tempted to get rid of 2, 3 and 4 - keeping 1 and 5 which would bring your average credit limit into the 3k range

rileydog

Heng_Leng wrote: »

Does your day to day card (3) have points or something making it worth keeping?

Otherwise, I would be tempted to get rid of 2, 3 and 4 - keeping 1 and 5 which would bring your average credit limit into the 3k range

Yep, card number 3 gets me John Lewis vouchers! Card 4 & 5 have no benefits and have the highest interest rates so I'd have no issues closing them. Card 2 gets Clubcard points so that's one I'd rather keep too.

bayzat

Doesn't make sense, if the money is sitting in a savings account, pay off the 0% cards now, and close the two you don't use.

rileydog

bayzat wrote: »

Doesn't make sense, if the money is sitting in a savings account, pay off the 0% cards now, and close the two you don't use.

It does to me The money sat in a savings account is earning me interest! I have no problem paying off the 0% cards early if it's likely to mean I have a greater chance of being accepted for the Clarity but if it's not likely to affect my application by having a balance on those two cards I'd rather keep getting the interest.

System

Probably best to stick with either the Tesco or JL card rather than keeping both to collect more points and build up a better limit.

Better to have fewer cards with better limits than lots of cards with small limits.

Only you will know if the stoozing is worth the hassle with the current low interest rates.

rileydog wrote: »

It does to me The money sat in a savings account is earning me interest! I have no problem paying off the 0% cards early if it's likely to mean I have a greater chance of being accepted for the Clarity but if it's not likely to affect my application by having a balance on those two cards I'd rather keep getting the interest.

YorkshireBoy

Are all these slow stoozing cards, ie 0% on purchases, or have you paid BT fees to retain previously assembled slow stoozing debt? If you have paid BT fees then these need to be factored in to your calculations as to whether to settle early or not.

rileydog

YorkshireBoy wrote: »

Are all these slow stoozing cards, ie 0% on purchases, or have you paid BT fees to retain previously assembled slow stoozing debt? If you have paid BT fees then these need to be factored in to your calculations as to whether to settle early or not.

They were straight 0% purchase cards, so I've just spent on them and put the cash that I would have spent into savings so it hasn't cost me anything. Card one has over a year to run at 0% so in an ideal world I'd leave the balance on there but am quite keen to have the Clarity for overseas spending so if needs be, and it'll increase my chances of being accepted, I'm happy to pay both the 0% cards off now.