Cancelling credit cards I don't use

mjv1986

Hi,

I'm not sure if this is a stupid question, but I have various credit cards for various reasons:-

• One to purchase most things each month and pay off in full
• One to put larger purchases and balance transfers on if I need to pay over 6-12 months. This one gives me some good offers every few months.
• One which is good for transactions abroad (though I haven't gone abroad for a few year now)

However, I have two that I haven't used for years, barely have any "offers" on. I have just kept them open for a kind of "I have them if I ever need them" reason. However, one of the CC's I have will run out of its special 0% transfer/purchase rate next year and I will look to transfer some balance to a new one.

Therefore my questions are:-

- Should I just close the ones I don't use and will it affect my credit rating?
- Will I be able to get another CC with all these other credit cards, so is it worth closing the two I don't use, so next year I can get a new one with a good offer.

Thanks for any help

Willing2Learn

Hi,

What are the ages, limits and offers on the respective cards?

The reason I ask about ages is because lenders like to see stability. Having a credit card for a long time, with a positive credit history, is a definite sign of stability.

[Deleted User]

The answer is 'it depends'.

Things to consider -

your income
your existing limits
any existing debts
the age of the cards
any immediate future credit needs

If you post up the relevant information, people can give you an informed opinion.

You want lenders to view you as positively as possible (which is nothing to do with the CRA credit rating).

mjv1986

All cards bar the Balance transfer one are over 5/6 years old. This one is probably about 1.5 years old.

Limit wise, the two ones I want to close have £6,000 limits each. However I have not touched these in about 4 years.

The other 3 I am using are about £16k credit limit in total, but the debt on them all is about £4k.

mjv1986

Deleted_User wrote: »

The answer is 'it depends'.

Things to consider -

your income
your existing limits
any existing debts
the age of the cards
any immediate future credit needs

If you post up the relevant information, people can give you an informed opinion.

You want lenders to view you as positively as possible (which is nothing to do with the CRA credit rating).

Personally I would not want to disclose my income so I appreciate you can't give me an in-depth analysis.

However, I was just wondering if there was any "general" rule, which from the 2 replies so far looks like there isn't! haha :rotfl:

MallyGirl

I keep
Amex for the 1% cashback
partnership for 0.5% cashback when they don't take Amex, plus it is the longest held.
Halifax Clarity for travel

the rest are 0% deals and I close them after 1 clear statement following the clear down just prior to offer end.
Tesco offer best deals to new customers and you need to leave them for 6 months before qualifying as new again.
Barclaycard on the other hand offer plenty of deals to existing customers
so "it depends"

user1168934

As others have said "it depends" but there are a few general rules I have learnt on the forum over the years which I tend to follow and I have not had any issues getting any credit cards in many years - here they are if it helps.


1. Do not let the overall credit available to you exceed your annual income. I normally just keep it around half of my annual income.

2. At any given time your credit utilization should not exceed 30% of your available credit limit.


3. Always try and pay at least £1 more than the minimum balance, although I have to admit I have not been able to strictly follow this rule in the past ... (cough) lazy (cough)

4. You can have any number of credit cards as long as you follow 1 and 2 above, although, I would close the ones you don't need/use purely because some times the best offers are left for new customers only and because it is a lot more manageable to have only a few. I normally keep 2-3 open at any time.

5. I have read that closing an account can have adverse effect on your credit history but I have not experienced it personally. My guess is that it can have adverse affect only when 1 and 2 are not followed (just a hunch like I said). I just close the ones where 0% offers have expired and apply for another one that I need.


6. It is also recommended that you keep at least one account open for a long long time to show stability etc. I used to have a card which I had kept open for 12 years. I had simply reduced the credit limit to 1K and would occassionally buy something small on it just to keep it going. Now that my foreign currency card (which I actually use) is around 5-6 years old I have even closed down that old card.



Hope this helps mate.

mjv1986

user1168934 wrote: »

As others have said "it depends" but there are a few general rules I have learnt on the forum over the years which I tend to follow and I have not had any issues getting any credit cards in many years - here they are if it helps.


1. Do not let the overall credit available to you exceed your annual income. I normally just keep it around half of my annual income.

2. At any given time your credit utilization should not exceed 30% of your available credit limit.


3. Always try and pay at least £1 more than the minimum balance, although I have to admit I have not been able to strictly follow this rule in the past ... (cough) lazy (cough)

4. You can have any number of credit cards as long as you follow 1 and 2 above, although, I would close the ones you don't need/use purely because some times the best offers are left for new customers only and because it is a lot more manageable to have only a few. I normally keep 2-3 open at any time.

5. I have read that closing an account can have adverse effect on your credit history but I have not experienced it personally. My guess is that it can have adverse affect only when 1 and 2 are not followed (just a hunch like I said). I just close the ones where 0% offers have expired and apply for another one that I need.


6. It is also recommended that you keep at least one account open for a long long time to show stability etc. I used to have a card which I had kept open for 12 years. I had simply reduced the credit limit to 1K and would occassionally buy something small on it just to keep it going. Now that my foreign currency card (which I actually use) is around 5-6 years old I have even closed down that old card.



Hope this helps mate.

Thanks for your help. I think I will just close them as they arent doing anything for me. As you say, one is with my main bank so I can probably 're apply for a CC in 6-12 months time if I need to and with an offer.

Bermonia

Another thing to consider is any future lending requirements such as a loan or mortgage.

Although the credits may not have balances on them many bank systems will consider your ‘potential indebtedness’ - so having large limits (even if not being used) can be held against you when applying for credit in the future.

Nebulous2

I'm not very good at closing cards. However if you haven't used them in 4 years I think you would be safe enough.

I don't follow any rules, but am well regarded by lenders. I've been in my house a long time, have stable employment, good credit history and am on the electoral roll.

I haven't had less than my salary in credit limits for at least 20 years. At times I've had twice my salary in credit limits. I've never changed a limit and accept any increase I get.

So I guess one of the lessons from that is there is a wide range of acceptable behaviour if your underlying fundamentals are sound.