Should I Close Credit Accounts?

GillianY1

Hi,


Looking for a bit of advice.


I have taken out a loan of 9k to consolidate borrowing I had spread over 2 credit cards and 2 store cards. ( I know generally speaking nobody here recommends consolidation but I managed to get a very low rate loan in comparison to my credit/store card rates which were around 19.9% to 29.9%)
My loan will be paid off over 3 years and having used the snowball calculator I will have my debt cleared 10 months earlier than I would have if I left it on the 4 accounts.


I was just wondering if it is best for me to close my old accounts or to keep them open and not use them? My fixed mortgage ends in December next year and I am looking to clean up my credit file and not have so many accounts in use. Does anyone know if its looked upon as a bad thing to have a lot of available credit even if it is not being used?


Any advice is much appreciated. Thanks.

Stereo

You can be seen by other lenders as more of a risk if you have multiple lines of credit available to you. Especially if it totals £9,000!


Personally I would close all your accounts except for one for emergencies.

Thrugelmir

Given you've obtained a loan to clear your accounts. Now would be a good time to reduce the number of active accounts you hold. Only retain what you actually need.

RavingMad

Having credit cards with zero balances isn't a bad thing in my opinion. I had quite a few when I got a mortgage and a remortgage and the banks were fine

What would be your reason for keeping them? All your debt is on the loan now so i imagine they're not going to be used for BTs any more?

jo-bo

I would keep 2, hopefully they would be the ones with the best aprs and the oldest ones you've got. You never know when you might need an emergency card and the section 75 protection is invaluable.

Monkeyballs

Hi,

Back in the day I would have kept them with the intention of only using them in emergencies and then waste it all times have changed though

My advice would be to keep on (the best Apr is a good starting point) and then reduce the credit limit to an amount that you could reasonably repay each month less £100 (to avoid temptation).

This gives you a readily available form of credit (great for Section 75 protection) while always ensuring that even if you max it out then you can afford to clear it at the end of the month and you have £100 spare in the bank clear should you need to go on emergency rations

MB of G x

thebritishbloke

If I were in your shoes, I'd get rid of them to get rid of the temptation to spend on them.

GillianY1

Thanks for all of your responses. I think I will close 3 of my accounts and keep one credit card but reduce the credit limit.

Whiner

GillianY1 wrote: »

Thanks for all of your responses. I think I will close 3 of my accounts and keep one credit card but reduce the credit limit.

Sounds like a plan to me.

xhotdog

of course...

cjd1991

Close all accounts!