Close Credit Card?

GadgetGuru

I have had a Post Office Credit Card for around 5-6 months or so.

Recently (within the last month) I have closed my Amazon/MBNA card, which I have had for several years) and opened a Tesco Credit Card.

They are the only 2 credit cards I currently have.

The Post Office card has a long 0% Balance Transfer deal - hence it had a £4k balance transferred. It currently has a £2k balance remaining.
The Tesco Card is used for general day to day purchases, but I have just put £5k on it.

Although I can pay both cards off today if I wanted, I like to keep the cash in my account just in case, especially considering they are both 0% anyway....

My initial thinking was that considering both cards are 0% for the next 1.5 years or so, that I would just pay them off a bit at a time and keep as much cash in my account as possible.
However, I'm now having a re-think.

This week I am paying off my mortgage completely :j

Now Im considering paying off both cards as well, so Im completely debt free.
I'd still have a few thousand in my bank account after paying off the mortgage and both cards, for a 'rainy day' if required, plus I'd have the entire balance of the 0% Purchases card as well.

I then plan to keep the Tesco card as my daily usage card (which has 0% on purchases anyway) and then close the Post Office card (0% Balance Transfer card) since it will not longer be required.

However, considering I will have only had the card for around 5-6 months, will this have a negative impact on my credit score?? I have always had a good credit rating and never been refused anything in the past.
Is it better to stick to plan A and just pay it off in bits over the next 6 months, for example, and close it later??

SuperHan

This is an instance when it's not clever to be debt free.

Open a high interest account (lloyds or TSB spring to mind - lloyds will pay 4% on the full £4k), and earn interest for the next 1.5 years. Without doing the math, and basing it roughly on the interest I get, you'll come out with about £10 a month in interest, that's £180 more for not paying your cards off.

If that isn't argument enough... Just close it, it won't be a detriment and will give you another settled account.