Should I ditch my credit cards

concrete_kid

After taking Martins advice to improve my credit worthiness by using a credit card and paying it off in full each month I now have a mortgage with a good rate and have managed to save an emergency fund.

I'd like now to take the tempation away and get rid of it.

If I do so, is my credit rating liklely to suffer. This isn't a problem at the moment but will be when I remortage in 5 years.

Could I just get a new card in 4 years so I have a credit record prior to applying.

Thanks

Fuzion

Could you not just cut it up but not cancel?

leslieknope

honestly i would keep it and use it for just petrol for example, with a direct debit to pay the full amount every month. using your credit shows lenders that you have a good history!

enthusiasticsaver

I would hang on to it and use it every now and again and pay off in full. Maybe for expensive items for the extra protection.

EssexHebridean

This depends on one word in your original post. You used the word "temptation" - and that's the key thing - if you are tempted to use it, and occasionally get drawn into the "oh I can stick it on the card, it'll be fine" way of thinking, then get rid. Keep an eye on your credit file (as you should do anyway) and you can see if not having it in use has any impact. To be honest I'd not worry too much about what you might or might not do in 5 years time anyway on the mortgage front - all sorts of things can happen financially over that timescale!

BettyBones

Once I cleared my Cap One CC I was tempted to close it down but I read somewhere that lenders like to see long, well-managed financial relationships. As the Cap One card is the longest financial relationship i've had (about 8 or 9 years now I think) and I've never missed a payment and always paid more than the minimum etc, I decided to keep it. I cleared it back in June last year and since then all I've done is put the odd work expenses on it and clear it in full each month. If I were you, I'd keep it and, as lesliknope suggests, just use if for petrol or something. However, if you think you would be tempted to go mad with it, then just get rid of it asap!

Bumblebear

How about reducing your credit limit on it to a smaller amount if temptation is a concern, that you'll always be able to pay off from your salary? That's my plan once I've got mine back to zero. I was once told by a customer service bod at Experian that alarm bells ring for them if you use more than 75% of any available credit, e.g. if you have a £400 limit, and use £325, that upsets them (same with overdrafts). It might be worth bearing that in mind if you do go down that route.

sourcrates

Cut it up, throw it away, never touch one again.

They are the spawn of the devil and more addictive than heroin !!

Puddylove

sourcrates wrote: »

Cut it up, throw it away, never touch one again.

They are the spawn of the devil and more addictive than heroin !!

To some people, perhaps.

But they also offer protection for purchases, and flexibility. I've got something like £30k total limits on CCs but that doesn't mean I am going to spend to my limit.

Helvetica_Van_Buren

I never understand the advice to 'just cut it up' instead of cancelling: credit cards are often connected with numerous services and so just cutting it up (and not cancelling it) would have very little effect. Not to mention the fact that unless you close the credit account, the credit card supplier will continue to report credit reference agencies.

That aside, keep it for emergencies. As someone pointed out above, spend on it for added robust consumer protection.

Pride yourself on being a responsible adult.

datlex

There are benefits to a credit card. As mentioned already consumer protection. Also depending on type of card it can give you rewards for spending on it.