Closing accounts once debt is cleared

Penlett

Hello :hello:


So after finally admitting that I did have a pretty big problem (see signature) I started to clear some of my debts - and I am getting there


I have cleared my Barclays Overdraft which charge 0.75p per day on balances upto £1000, and £1.50 per day on balances upto £2000. The limit is currently £2000.


And I have cleared my Barclaycard Credit Card which has a limit of £6500 and an interest rate of 29.9% - my question is;


During racking up this debt my credit rating has suffered and I know that I will not be accepted for any 0% purchase cards - do I keep the credit card and/or overdraft just incase (or possibly lower the overdraft to say £500 as a bit of a safety net). Or should I just cancel them both because they are both terrible rates anyway, and keep a close eye on my spending?


Will cancelling them look better on my credit rating? Or will keeping them, but not using them look best? Or using them and clearing them each month for that matter?


I am sorry for the multiple questions, I am new to dealing with debt.


Thank you in advance

Tixy

Assuming you don't have an emergency fund then I would keep at least one of them for a safety net.

That is assuming you are confident that won't be tempted to use them except for in an emergency. Reducing the ovedraft to a few hundred would probably be what I would do.

I would keep the credit card for an emergency fund, and in case they offer you a 0% balance transfer deal in the future (which you might then use to pay off one of the other debts and then keep the cleared card as the emergency fund card).

Penlett

Hi Tixy,


Thank you for your reply. You are right, I do not have an emergency fund. I still have several debts left so am really concentrating on clearing those first. I thought that what you have suggested would be the right way to do things with the overdraft but was a little unsure due to the credit rating side of things.


I will not spend on the card unless of an emergency. But again, I was wondering about the credit rating side of things.


Many thanks

patman99

It looks like you have at least 4 other credit cards on which you have debts. If it were me, I'd close the Barclaycard as having to many credit cards and loans on your file can affect your credit history.

By all means leave your overdraft in place as a fall-back. Whichever card you pay back last, keep open for emergencies and at that point reduce your overdraft to £500.

bargainbetty

You could call Barclaycard and ask if they have any 0% deals or low life of balance deals available to existing customers. If so, transfer over one of your higher interest debts to save a bit of money, plus you can use the money you aren't now paying Barclaycard to bring down another high-cost debt as well!

Got to be worth asking...

patman99

Actually, thinking about it, what are the interest rates on the cards ?.
If the Barclaycard has a lower APR than the others then reduce your total pay-back by transferring part/all of the balance across to it. After all, you have £3100 to play with.

Penlett

Hi Patman, thank you for your reply.


Yes I have 4 other credit cards, 2 at 0%, 2 at 19.9% so I need to clear those quickly. So I will be left with the Virgin Credit Card which has a slightly smaller, but large enough, limit of £4500.00.


Many thanks


Sorry - posts crossed over there! the Barclaycards interest rate is 29.9%, the other 4s rates are above.


Thank you bargainbetty - I have tried asking that before, and they said no I could ask again though - thank you