Should i close one of my credit card accounts?

rx8al

I'll be brief, but this post is really about my credit rating.

I have 3 credit cards, I used to have 2 (dugh) until recently when my car insurance became due, being 19, and my insurance being 1400quid i have taken out an interest free card (halifax one) for a year so i can pay that off over the year, and not have any extra costs.

I will also start spending on that, but i think its wise to keep my Morgan Stanley to be safe, in-case i lose my Halifax.

I have a capital one , with a credit limit of 1300, compared to 4200 and 6100 for the others.

Is it right that if you cancel a card, it doesn't do favours for your credit rating?

Secondly, if i have 2 credit cards sitting there with no expenditure, is that adverse in some way to my credit rating?

Thanks for any advise!

Moggles_2

If I were you, I would probably cancel the Capital One card.

Unless a card has a particular benefit (such as Nationwide's zero commission on foreign transactions), loyalty rarely pays.

Firstly, having loadsa credit, even if not used, can put off potential lenders and secondly, by cancelling a card you can re-apply to that provider as a 'new' customer and take advantage of any introductory deals on offer.

Another good reason for phoning customer services to cancel an unused card is that occasionally you're offered an incentive to stay! :rolleyes:

wimblewomble_2

whats the optimal credit-to-debt ratio for cards?
is there a formula, so that I dont have to give my income?

I have done a bit of analysis on my cards, and was shocked!

I have 8 active cards, with a total available credit of 65K! I am not joking. I just used to apply for cards, use them, then forget about them.
I actually only have about 14K debt, of which 11K is on a 0% card.

thansk to this site, I now understand the benefits of cancelling unused cards, and possibly can explain why I got turned down for a Barclaycrd recently - probably due to the unused credit.

Is there anything wrong with cancelling 3 or 4 cards in one go?
Also, is asking to have the credit limit reduced on some cards a good thing?
(I use a couple of cards to separate my business expenses from my personal expenditure)

thanks in advance for help.

wimblewomble_2

have found appropriate thread and articles - problem solved.

mogwai

can you post a link to the thread and articles please? I was going to post to ask the very same thing!

wimblewomble_2

no probs: at top of credit-card forum there are a number of useful links:
I got my info from the "Credit Ratings" link.
hope that helps.

http://www.moneysavingexpert.com/banking/credit-rating-credit-score