Should I cancel my longstanding credit card?

Gregory14

Hello!

I have 3 credit cards, one of which has a long period of 0% interest left (Virgin), one has a balance of just under 50% of the credit limit and the 0% interest is due to expire (Barclaycard) and the third card is clear (NatWest).

I will soon be looking for a 0% balance and money transfer card for the balance of the Barclaycard, but I am wondering whether I should cancel the card that is clear before doing so.

My natwest card is my longest standing credit card, and I have never missed a payment on it so that should look good in terms of my credit history as a reliable borrower. My concern is that lenders will be less likely to offer me the amount of credit I require for the transfer whilst keeping the NatWest card open as it will appear to them that I already have enough credit so why would I need more?

My credit score is average.

I hope I have explained this clearly enough, your advice as always is much appreciated! :beer:

Gregory14

Posting this as I forgot to subscribe to this post and I'm not sure if I would get notifications automatically as I started the thread!

Can you tell I'm a newbie!? :rotfl:

[Deleted User]

I would look more towards your income and available credit, rather than number of cards available to you.

I would also be wary of closing a card if your debt to balance ratio worsens too much.

Candyapple

When you say your credit score is average - why is that? What reasons do the credit reference agencies give you as to your score?

The free versions to check your credit files are below:
Experian: https://www.moneysavingexpert.com/creditclub
Call Credit: https://www.noddle.co.uk
Equifax: https://www.clearscore.com

What is the age of your Natwest account?

Please list all credit card limits along with outstanding balances.

Do you have any other loans / overdraft / car finance etc?

Do you have any late payments / defaults / CCJs?

What is your annual salary?

Are you on the electoral roll (does it show on all 3 files?)

Do you have any other closed / settled accounts in your history?

Do you have many other 'credit' accounts showing on your files such as bank account / mobile phone etc.?

Gregory14

Here goes nothing...

I opened my NatWest card in Sept 2013 so coming up to 4 years old.

NatWest limit: £3550 Outstanding Balance: £0
Virgin limit: £3100 Outstanding Balance £3000
Barclaycard limit: £6250 Outstanding Balance £3085

No defaults or CCJs. Upon checking I actually did have 2 late payments on NatWest, but a long time ago, Jan and Feb 2014.

No loans. Overdraft of £900 (which I plan to pay off with the new credit card). Car finance £7500 approx, my PCP comes to an end in September where I will have options whether to continue with the agreement, which I still haven't decided.

Salary £15899 (will be increasing to £16332 next month as I receive and annual increment).

I am on the electoral role.

3 closed accounts - a Topshop store card, Shop direct (very.co.uk) and a credit card I applied for last year but cancelled before receiving the card as the credit amount offered was not enough to cover the balance transfer.

My main current account and phone bill are both listed as open accounts but as £0 (never missed a phone bill payment and I've never gone overdrawn with this current account).

I also have a shop direct (very.co.uk) account open with £0 balance, but this is in the process of being closed.

I don't think I've missed anything there...

Thanks for your help.

Candyapple

Thanks for the detailed reply.

OK, your total credit 'allowance' so to speak is £21,300. Your total debt outstanding is £14,485.

So going by your new salary of £16,332, the debt of £14,485 you can see you are roughly at 90% of your salary.

If you applied for any new credit, my guess is you would be declined on grounds of affordability.

If you close your Natwest card;

Pros:
1. It frees up another £3.5k of credit that could potentially be used by taking out a new card
2. It will add a long standing account to your settled accounts

Cons:
1. Your credit card debt to credit ratio will go from 47% (what it is currently) to 65%.

Check your eligibility now as to what is available for you:
https://www.moneysavingexpert.com/eligibility/credit-cards/

What do the results show?

If you are getting low percentages, you'd be better off closing the Natwest card and then waiting 3 months - check that it is shown as closed across all 3 CRAs and then do the MSE eligibility check again.

bargainbetty

The alternative would be to call Natwest and ask for a balance transfer deal with them. Then empty and close the Barclaycard just before the interest kicks in.

That way you do not have to apply for any new credit lines, and can just utilise what you already have.

Gregory14

Virgin cards are showing at 95% but as far as I'm aware, these offers are for new customers only and I have an existing virgin credit card, am I right in thinking that?

The next after that is Tesco at 80%.

Let's say I keep NatWest open and get accepted for a new card at the limit I require, would you suggest I keep both Barclaycard and NatWest open and at £0 to keep the debt to credit ratio down, or should I cancel one of them?

I'm determined to improve my credit rating so wouldn't want to affect it by doing something as simple as cancelling a card! I have never missed a payment on the Barclaycard and have had that card since December 2014.

Thanks

Gregory14

I have considered this, but I want to borrow a little more than my current limit with NatWest in the form of a money transfer to pay off an overdraft. I guess it's still worth a call though as they may be willing to increase the limit for this!

Thank you for your help.

Candyapple

bargainbetty wrote: »

The alternative would be to call Natwest and ask for a balance transfer deal with them. Then empty and close the Barclaycard just before the interest kicks in.

That way you do not have to apply for any new credit lines, and can just utilise what you already have.

I thought Natwest got rid of balance transfers deals in 2014?
http://www.moneysavingexpert.com/news/cards/2014/03/natwest-and-rbs-scrap-0-credit-card-deals-but-their-new-offer-can-be-beaten

Gregory14 wrote: »

Virgin cards are showing at 95% but as far as I'm aware, these offers are for new customers only and I have an existing virgin credit card, am I right in thinking that?

The next after that is Tesco at 80%.

You are allowed to have 2 Virgin credit cards.

Both Virgin and Tesco are very generous with their credit limits.

If you applied for a new card and was successful, I would still close the Natwest card as it's not doing anything and just eating up unwanted credit.

System

If the NatWest isn't doing any offers or anything else useful, I would close it.