should I close some credit cards?

l3xi

Hi, I'm due to remortgage next year and trying to improve my credit rating (whatever that is). I'm trying to clear debts as much as I can by then (hope my cc debt won't be higher than 5K at the time of remortgage), but at the same time perhaps closing some credit cards (or even reduce ovedraft limits on bank accounts would help? List is below. Any ideas?

• MBNA £0 balance, £5000 limit, 16.9%. I don't use this card any more, but it's my oldest credit card.
• Barclaycard Simplicity £0 balance, £5,000 limit, 7.9% lifetime interest rate.
• Halifax Clarity £0 balance, £2,000 limit, 17.95 interest rate. This one I won't close. I use only when I travel because of the no load fees and no currency transaction charges. Never kept a balance on it, always paid in full.
• Tesco £8,700 balance, £9,500 limit, 0% interest for the entire balance until May 2017. Obviously this will stay open until I pay off the balance in full.
• Lloyds £3,000 balance, £4,300 limit, 0% interest rate for the balance until July 2016.

On top of this I have the following overdraft facilities on my account:

• Barclays £2000 limit, first £300 fee free
• HSBC Advance £300 limit, there's interest but I never went into overdraft on this one

I won't be applying for any new credit until then, and I've been on the electoral roll at my current address since 2012. No missed CC payments.

I'm closing Lloyds in December after I pay off the balance. Should I also close MBNA? And possibly reduce the Barclays overdraft limit to £300 fee free? Is there such thing as 'too much credit available'?

20aday

Depending on your salary there's something called ratio to income (or similar along those lines).

I definitely recommend keeping your oldest card as future lenders like to see historical account conduct. Might be worth contacting MBNA and seeing if they'll offer you a future promotion on interest free on purchases/Balance Transfers/Money Transfers.

Not sure how much of your Barclays overdraft you use (if at all) but if it's always below the £300 fee-free limit it might be worth your while (in the longer term) reducing it down. Overdrafts are repayable on demand so if they decided to reduce it you could encounter problems in the future? (Don't quote me on that though!)

l3xi

Thanks, the MBNA card does offer a promotional 0% on balance transfer but with a hefty 4% transfer fee, so it's of no use to me.

Barclays OD - I only use the £300 fee free limit, never went over that. I think I'll lower the limit from £2000 to £300, but for some reason it's psychologically hard to do that :-) I find it easier to close CCs.