I have 4 credit cards with £40k limit across all 4 with nil balance - should I keep or close

bigpappa

So I have 4 cards across three providers, with a total limit of £40k and a zero balance across all 4 of them.

The age of the cards is 13, 5,5, 4

Should I cancel the cards or just keep them? I don't gain much from in benefits ie caschback etc.

adamp87

Possibly if they aren’t being used with the current climate you may find they are reduced or closed by the provider at some point.

If you can trust yourself with them there’s more to be gained in keeping them open in my opinion in the event of an emergency or purchase you may need to make in the future. 

cymruchris

If they are remaining at zero balance as you're in control, and are likely to stay in control, then I'd keep them open. There is a possibility that without use, the limits might get reduced. Are you considering a mortgage or other large financial commitment over the next year or two? If so, having unused available credit can be a positive factor to a degree. If you're fully paid with your mortgage and don't see yourself making any big purchases, you could close a couple of them down, but will all depend on your own circumstances - there's no fixed rule that applies to everyone.

bigpappa

So I should just use them infrequently?

I cleared what little was left as I might be taking out a second mortgage and I thought its best to have all cards cleared.

I may be making a big purchase either a house but definitely a car perhaps in 6-8 months. I was thinking close all my cards and then sign up for a card with a big limit and nice offer around nearer the time I buy the car.

So you get penalised for closing accounts?

[Deleted User]

Lenders may view multiple card closures as a sign that other lenders no longer trust you.

Just use them occasionally and clear in full each month.  It'll show good credit management.

You can't sign up for a card with a big limit - they'll give you the limit they feel comfortable with, so show them that you're a safe bet.

bigpappa

Deleted_User said:

Lenders may view multiple card closures as a sign that other lenders no longer trust you.

Just use them occasionally and clear in full each month.  It'll show good credit management.

You can't sign up for a card with a big limit - they'll give you the limit they feel comfortable with, so show them that you're a safe bet.

I always thought pay your bills on time, do not get into excessive debt and when you need to get a mortgage or finance you will get the best offers. It seems very counter intuitive to keep credit open but if thats whats required then its no hassle for me.

It's just I liked the idea of closing accounts.

[Deleted User]

bigpappa said:

I always thought pay your bills on time, do not get into excessive debt and when you need to get a mortgage or finance you will get the best offers. It seems very counter intuitive to keep credit open but if thats whats required then its no hassle for me.

It's just I liked the idea of closing accounts.

That's exactly right.  Don't get into excessive debt and pay your bills on time and you WILL get the best offers.

But if you stop using credit altogether and give no evidence you can do the above, then you won't. 

Don't equate credit usage with debt. It's simply a smart way to make yourself wealthier in a number of ways.

Mickey666

Deleted_User said:

Don't equate credit usage with debt. It's simply a smart way to make yourself wealthier in a number of ways.

Agreed.  Use credit cards all the time BUT have a direct debit to FULLY pay them off every month, preferably a cashback CC - they don't pay much these days but it's better than nothing.  Where offered, use interest-free credit deals, eg house insurance, car insurance.  Basically, get as much on record about your borrowing and repayments.  Assuming you never miss a payment (difficult with direct debits!) you're constantly building a good credit-worthiness record.
Basically, use as much credit as you can but preferably never for debt, ie anything you can't afford to pay off immediately.  Homes and cars probably being the major exception.

Penelopa.Pitstop

Just use cards once in 6 months for small purchase. I top up Amazon with £10 from time to time, to avoid letters that my card is unused and it will be closed.

bigpappa

I have just logged into my accounts and as they are zero they will not be taking DD - will this come up as missed payments?

[Deleted User]

If there's nothing to pay, you can't miss a payment.