Should I cancel an unused credit card?

earthzebra3

I have just shifted via a balance transfer a balance off a credit card for 0% interest for a while. I don't plan to use the card that now has a zero balance so my question is.....to improve my credit score am I best to cancel the card or keep it dormant?

[Deleted User]

Neither.

Keep it and use it.  It won't improve your credit score but it will improve how lenders see you, which is what matters.

cymruchris

Unless you have 19 already - and you're like most others with just a small handful of credit cards - keep it - use it regularly for an everyday purchase or two, pay in full by direct debit - that'll help your positive financial history - not your imaginary score. Having a reasonable amount of available credit and regularly made payments will both improve your file data in your attractiveness to future lenders.

PixelPound

So,
scenario 1:  You open a card with a promotional rate, when the rate ends you open another and close the first. Only ever having one card open and that's on promotion

scenario 2: Your promotion ends and you open a second but keep using the first. So you have two cards open, one on a promotion rate and one not that's being used regularly and no missed payments.

That's what creditors would see - so sometime in future which looks better to a potential creditor - scenario 1 where they'll get no profit only cost as you never stay beyond a promo rate, or scenario 2 where you turn into a "valued customer" and can see to be responsible by maintaining credit access. Scenario 1 does not say whether you would be responsible with credit, in fact you could be seen as a risk as you always close cards so surely don't trust yourself.
Also 
Scenario 1a: don't close the card but never use it. This could either also be you are a risky proposition as don't trust yourself to use it, or don't need credit as not using so are a cost liability. Either way negative factors for future credit.