Should I keep my credit cards?

emsywoo123

Hi all,
I currently have 5 credit cards:

1) - Capital One, Limit £1000, paid off April 2015
2) Capital One, Limit £200, paid off Jan 2015
3) Capital One, Limit £1800, paid off Feb 2016 (woo hoo!)
4) Tesco, Limit £4800, Balance £4400 (on 0%)
5) Barclaycard, Limit £4000, Balance £1770 (on 0%)

I am no longer in possession of the Cap1 cards, I had to cut them up (zero willpower!!)

Does it look better that I am only using £6170 out of a possible £11,800, or would it look better if I had less cards? (but therefore using more of my available credit, £6170 out of £8800?)

Candyapple

I would probably get rid of the Cap One cards, purely because the low limits will look like you have subprime cards to other future lenders.

If you need a card to spend on, why not close the Cap One cards, wait a few months for it to reflect in your credit files and then apply for a 0% purchase card?

Gouki7851

High utilisation looks bad to new lenders, but so does a high available credit to income. So it's dependant on your income whether you close them or not. Ideally you want your balances around 33% or less than your limits, and I think I read somewhere you should not have limits over 50% of your income (I may be corrected on this though)

emsywoo123

Candyapple wrote: »

I would probably get rid of the Cap One cards, purely because the low limits will look like you have subprime cards to other future lenders.

If you need a card to spend on, why not close the Cap One cards, wait a few months for it to reflect in your credit files and then apply for a 0% purchase card?

Thank you. I do not need a card to spend on, lightbulb moment and all that, so I am just using the cards as a 0% loan as I pay them off. Aware my 0% are coming to an end relatively soon, so trying to get myself in the strongest position to get a new low interest card to continue paying off if poss.

emsywoo123

Gouki7851 wrote: »

High utilisation looks bad to new lenders, but so does a high available credit to income. So it's dependant on your income whether you close them or not. Ideally you want your balances around 33% or less than your limits, and I think I read somewhere you should not have limits over 50% of your income (I may be corrected on this though)

Thank you. By keeping the cards open, the limits are still well under 50% of my income, and I my balance is at about 52% of my limits.

Gouki7851

On that basis closing the capital 1 cards would be a bad move. Even with a low limit on one of them lenders will see the higher limit cards and not class you as high risk. You could have chose to have a low limit because of various reasons, but with high limit cards you will certainly not be seen as sub prime.:money: