Debt Free - Old Accounts...

D3P0

Now i'm debt free and looking to re - invent myself. Is it best I close off all the old accounts which are settled? Thinking off:

the lloyds account I had a huge overdraft with (still have the account just not the OD).

old credit cards which are paid off in full but have a large balance available now (fraud risk!?)

I want to keep my nose clean for a few years now and save for a deposit on a house. Is it best to close these, and start again?

HappyMJ

You need to keep using them a little bit. Buy stuff on credit card and pay it off in full each month. It just shows you can manage credit without maxing out your credit limit.

I've kept all mine and still get approved for new credit.

rockm87

Please be careful, if you cant be trusted with credit done use it!

You are still exposed to credit (i.e. phone contract, sky tv etc) without the risk of using a credit card and racking up another huge debt.

if you can trust yourself, I would lower your credit balance (say £500) and possibly use it for fuel and then pay in full every month.

I'd close off the lloyd account, you dont need an overdraft if you budget correctly.

Good luck to you and well done for getting debt free!!!

Mr_Mink

As Rockm87 said, avoid credit like the plague unless you feel 100% in control. If you do low limits are a good thing and specifically regarding your question, I'd be going for new accounts, those old ones probably have terrible rates compared to a new account with introductory offers.

Congrats on the debt free and enjoy, can't wait till I join the club.

D3P0

Thanks all,

I can't control it, that's how I got there. I don't have cards for any of the accounts. I'm tempted to close them all off...

fozmcfc

Well done on becoming debt free, it's a great feeling.

When I started my debt free journey and I got rid of my Egg card balance, I reduced the limit down to £500 from £4000 to avoid temptation.

It's good to keep some credit available and use it sensibly now and then. You'll need some sort of decent credit rating to get a mortgage and having no credit rating, can be just as bad, as having a bad rating.

Myself in your position, I would reduce limits down to manageable limits and refuse raises for now.

My Egg card (now Barclaycard) was costing me £75 + in interest at one point, now even owing £500 wouldn't incur anywhere near that much for a minimum payment.