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Exchange and pay credit cards?
Hanger_boy89
Posts: 118 Forumite
I'm due to exchange on my property this week and will be applying for a mortgage in a month or so. I want to use some of this money to clear my credit cards £3500 in total. Is it worth me closing down 2 of them and keeping just 1 open? Or does it not really make much difference for my mortgage application?
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Comments
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Pay them off but don't go opening or closing anything at this stage.0
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Great thank you0
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Oh and another thing - I currently have direct debits set up to make the minimum payment each month. Once I've paid them in full, do I just cancel the direct debit?0
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Yes - but keep them in place for any trailing interest.0
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If I didn't cancel the direct debit, would it continue to take any money? I assume not if there was nothing left to pay on the credit cards?0
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No payment will be take if nothing is owed. But many people get caught out by cancelling the DD too early.0
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That's what I'm worried about. I'm tempted to pay them in full, leave the direct debits and just cancel them after I've got the mortgage sorted. You think that's a sensible idea?0
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Yes. But why the urge to cancel them? Using a credit card regularly and clearing in full each month is the easiest way to maintain a solid credit history, as well as giving section 75 protection, emergency backup etc.
Or are these just some of many cards you have?0 -
The only reason I mentioned cancelling them was because I've heard people say lenders don't like knowing that you have access to too much credit. I have 3 cards with a total debt of £3500 so I'm going to pay them all off and just leave them all open until later in the year once I have my mortgage. Thanks for the advice!0
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I would leave the direct debit in place for the time being - it means that if, in all the busy-ness of moving, you forget to pay your credit card bill, at least the minimum will be taken thus avoiding any charges for non-payment/late payment. Work towards paying them off in full every month and change your direct debit to do this when you can.No longer a spouse, or trailing, but MSE won't allow me to change my username...0
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