Unused Available Credit

iamdavidbecker

I have several credit cards with zero balances with about £20,000 of available credit. I always thought that it was better to have a whole load of available credit and to not be using it but one of my colleagues says that it will be better to reduce the overall amount of credit available to you...

Is he right??

Candyapple

There's no right or wrong answer.

Some people like to hold large limits with zero balances to increase the lifetime accounts age for their credit files.

Others may want to limit their exposure and may reduce the limits because they may want to get a new card in the future that offers rewards/0% purchases etc and having empty large limit cards usually means that a new provider may offer you a lower limit because you are holding a lot of credit so to speak even if you aren't using it.

Others may even want to get rid of all but 1 credit card, or possibly just 2 and even then reduce the limits.

Or you may find that some lenders only offer decent 'deals' to new customers only - and if you are an existing customer you don't qualify. Thus to become a new customer again you have to close your account and re-apply within a certain time frame.