Keep paid off cards open?

AliceBanned

Hi


I have recently transferred the full balance of a First Direct card (interest rate of 19%, £1400), with a Tesco 0% for 30 months card.


I have several other cards and loans to repay and have recently found that I am being offered better deals as I have lowered my overall debt levels a bit (slow going but am getting there).


My question is, would I be best to leave the FD account open and after a few months phone them to see whether there are any deals on offer, so that I can switch another higher interest card to them? Or is it best to close them as I go and then apply for new BT cards as they become available? I use Noddle and MSE credit club eligibility checks and these both seem fairly accurate so I don't apply for any unless I have 50% likelihood of acceptance or above.


I've also applied for a Tesco loan at 3% APR and await a response (to pay off a high interest overdraft and other cards/loans. I know consolidation is not recommended but I have reduced my debts somewhat already (and cut back on my outgoings/done budget using YNAB) so am on a roll. I think it is working for me.


Tesco seem to have more offers than any of the other lenders for me at the moment but then again I have a closed Barclaycard which I am paying off, so unlikely to get a deal from them, and same with Halifax on 2 accounts. The only other cards that now come up are Cap One/Aqua etc which I know are for poor scorers but I got a Ratesetter Loan to pay off another card. Slowly chipping away at around £500 per month in debt repayments, and determined to keep going.


Thanks for any advice.

[Deleted User]

In addition to future potential offers, you need to consider your total limits in relation to income, and limits to balances.

There's no one set answer for everyone. However, Cap One and aqua are unlikely to offer anything of significant interest and you have better options.

AliceBanned

Thanks zx81. I am trying to get away from Cap One and Aqua. I seem to have been in a vicious circle where they were the only offers I had at one stage. I got 0% deals then didn't repay them in time and ended up with 34% interest, even though the balances were usually between £300-£1000. Now I have a Cap One with a balance of £200 so I may try and pay that off and close it.

Dobbibill

It's a balancing act.......closing old accounts can be good if they are of no benefit in the future (not having too much available credit that it causes declines from others) but some cards are known for their existing customer offers. (Barclaycard being a good example).

I don't know if FD offer existing customers BT deals but could be worth hanging on to it for a bit to see.

Getting it right between, overall available credit and not too much utilised credit, is a balancing act Good luck with your DF journey.

No_6

Close and recycle when available.

AliceBanned

Dobbibill wrote: »

It's a balancing act.......closing old accounts can be good if they are of no benefit in the future (not having too much available credit that it causes declines from others) but some cards are known for their existing customer offers. (Barclaycard being a good example).

I don't know if FD offer existing customers BT deals but could be worth hanging on to it for a bit to see.

Getting it right between, overall available credit and not too much utilised credit, is a balancing act Good luck with your DF journey.

Thanks Dobbibill. I will keep some available credit in that case. I have been closing cards and paying them off afterwards, or paying them off and closing straight away. So no harm in trying to keep the FD for a while.


I am going to get rid of the 'poor credit' cards asap.

planteria

in the past i have kept accounts open, hoping for, and angling for, repeat offers..
nowadays they tend to be less common ime.
i have tended to try to merge limits, following applying for a new introductory offer, such as from Barclaycard or MBNA.

AliceBanned

Thank planteria. Good point and it has been helping me to pay them off, if I close them, though FD would not allow me to close it whilst it had a balance. Now I have paid it off I can consider this.


What do you mean by merging credit limits? Thanks.

planteria

with you. if, for example, i had a £20k limit on an MBNA card. i might have asked them for a repeat, and been offered 12m with a 3% fee. but if i apply for a second card and get a £10k limit - with a deal of 24m with a 3% fee, i have then managed to merge the £20k limit into the new account, so i get the good deal on c.£30k. it doesn't always work out exactly as planned.. and they often go through different phases re. these things. recently Barclaycard would not open any additional accounts at all, for example, so the above was impossible. i think second cards are back on the, erm, cards again nowadays though.

AliceBanned

OK, I see what you mean. I'll bear this in mind when I get some of my limits down further. Thanks.


I have two Tesco cards now - the first one only offered £250 at 0% BT for one month, then 2 months later I got a 32 month BT to pay off the FD card. I have been stuck with old debts on Halifax, Barclaycard (though they reduced to 6.9% thankfully!), FD and Cap One for a while so at least it is starting to shift now that the balances are reducing more. I have moved some onto loans purely as it is better for me discipline-wise. I need to be careful with the plastic but at least I know this now and am used to being more frugal - it has become an obsession.

AliceBanned

Just reporting back - after the advice I've been given on here (thanks everyone!) FD has now offered me 18 months 0%:j (previously 18.9%) BT because I left it open after paying off with a BT to Tesco (30 months 0%). This will really help speed up my debt repayments. I was trying to close them all but I've been given good advice on here, especially to keep some open - I will try and close the Cap One though as that hasn't helped me out long term.


Off to do my spreadsheets now and see how long it will take me to repay my debts given these extra boosts.


The money from Tesco only went in today - I didn't even have to wait before FD gave me a good deal. I tried asking them when my balance was close to the limit and they wouldn't do it. I know I'm starting to manage money better and hopefully the snowball has begun..