What to do about card cancellation...

CBU2004

Due to the T&C's of my Vanquis card they have sent me a letter stating my account will be closed if my card is not used within 28 days due to inactivity.

The reason it has not been used is after I used it for around a year I got accepted for ASDA cashback credit card at 19.9% APR, a Tesco Credit Card Clubcard at 21.9% APR and also a Barclaycard Platinum Card which had a great BT offer when I first got it.

So...do I keep hold of the Vanquis card and have more credit available or should I just let it close as it may be better to have less credit available when applying for a loan or finance for example in future?

My ASDA has a limit of around £4,700. Barclaycard around £5,200 and Tesco is £200.

The Vanquis is £2,250 but I never use it as it offers no rewards and is at 39.9% APR.

grumbler

Do you carry balances on your CCs?
If not, then APRs are irrelevant.
If yes, and the total balances are well below 50% of the total limit, then there is no point in keeping the empty Vanquis card. Otherwise having it can be beneficial as it reduces (used)/(available) ratio.

CBU2004

grumbler wrote: »

Do you carry balances on your CCs?
If not, then APRs are irrelevant.
If yes, and the total balances are well below 50% of the total limit, then there is no point in keeping the empty Vanquis card. Otherwise having it can be beneficial as it reduces (used)/(available) ratio.

Yes on my Barclaycard around 60% is on an interest free BT (This obviously reduces each month as I pay around £100-150 off each time)
Asda card I pay off in full, currently use around 10-20% then pay in full each month. Same with Tesco Card.

Vanquis has been at £0 for some good time now.

redpete

If I were a lender I would count a higher available balance as a negative on my credit risk assessment - but I'm not and some real lenders might treat it differently.

bearcat16

The % used of your available credit is a factor in determining your credit score, and generally the lower that % the better. Therefore having more unused available is not a bad thing.

HOWEVER, the way lenders treat the presence of a Vanquis card is complex. Some (especially those that will want to look closely like mortgage companies) will view it negatively since it is a card generally used by those with poor credit histories and it's very presence on your file is an indication of past problems.

The same is true of payday loans. Even if you pay them immediately, just the presence of them on your file will cause some mortgage companies to refuse to lend. (A mortgage broker once told me that they show "poor financial management")

If I were in your shoes, I would allow the Vanquis card to be cancelled, especially as you don't seem to need it anymore.

CBU2004

redpete wrote: »

If I were a lender I would count a higher available balance as a negative on my credit risk assessment - but I'm not and some real lenders might treat it differently.

I was thinking the same. I am considering getting a low APR loan, but if they see I have a lot of available credit then they may say no due to this. Thanks.

CBU2004

bearcat16 wrote: »

The % used of your available credit is a factor in determining your credit score, and generally the lower that % the better. Therefore having more unused available is not a bad thing.

HOWEVER, the way lenders treat the presence of a Vanquis card is complex. Some (especially those that will want to look closely like mortgage companies) will view it negatively since it is a card generally used by those with poor credit histories and it's very presence on your file is an indication of past problems.

The same is true of payday loans. Even if you pay them immediately, just the presence of them on your file will cause some mortgage companies to refuse to lend. (A mortgage broker once told me that they show "poor financial management")

If I were in your shoes, I would allow the Vanquis card to be cancelled, especially as you don't seem to need it anymore.

Never thought about this, I think I will just let it close then, I got it just to build my score as I had never had any credit/debt or anything before this card so it was my first available step in getting any form of credit.

Hopefully future lenders will see a pattern of acceptance at better rates from better credit cards!...and obviously all of the on time payments to go with it lol.

Thanks

grumbler

bearcat16 wrote: »

HOWEVER, the way lenders treat the presence of a Vanquis card is complex. Some (especially those that will want to look closely like mortgage companies) will view it negatively since it is a card generally used by those with poor credit histories and it's very presence on your file is an indication of past problems.

You say this like if you really have some knowledge of this.

In fact lenders can't even see "the presence of a Vanquis card ". What they can see is some card with the the credit limit, the balance and some other details. They can't know that it's Vanquis.

boo_star

grumbler wrote: »

You say this like if you really have some knowledge of this.

In fact lenders can't even see "the presence of a Vanquis card ". What they can see is some card with the the credit limit, the balance and some other details. They can't know that it's Vanquis.

Exactly.

It will show as "Credit Card. Limit - £2250"

I suppose if they looked at the limit history they might be able to tell but frankly, everyone starts somewhere. Your account conduct (especially with a further two accounts open after) is far more important than a subprime card being active.