Debt Free!!! And further advice

Iwillresolvemydebt

Hi,
I'm absolutely delighted to say that I am debt free. Its been long and at times painful but I'm there. Many thanks for previous advice to help me get here. I have  question now though: I now have no credit accounts with any balance on. As such, what do I do with my 5 credit cards? My understanding is that I need to use one/them to continue a credit history, to show worthiness. What are your thoughts please? 

Ebe_Scrooge

Without knowing your personal circumstances it's hard to give exact advice.  But in general yes, sensible use of credit cards can go a long way to building up a favourable credit history.  Use the cards for everyday essential purchases, things you'd buy anyway - food, travel costs, petrol, whatever.  Wait for the statement each month and pay it off in full before the "payment due" date.  Simplest and safest is to set up a Direct Debit to pay off the full amount.

If you have several cards, rotate them - use one card one month, another the next.  If a card is left unused for a long time, the issuer will usually close the account.  The only caveat to that may be if any of your cards offer rewards - cashback, points, airmiles, etc.  In that case you may want to use that card mainly, and just use the others occasionally to keep them active.

The key thing is to only use them for things you can afford, and to make absolutely sure you pay them in full every month.  The problems arise when you use them to buy "treats" you can't really afford.  Before buying something on the card, ask yourself "Could I afford to buy this item for cash right now?"  Obviously, you'd need to bear in mind, when asking this, the fact that you've already got transactions on your card that are going to need to be paid when the statement arrives.  But it's easy enough to keep track of what's pending - either by looking at your account online, keeping a running tally on a spreadsheet or simply writing down each purchase in a notebook.

But yes, sensible credit card use is probably one of the simplest ways to improve your credit history.

Iwillresolvemydebt

Many thanks for your feedback. I am somewhat very luckily, in a good position in that I have recently changed jobs, with a much better income. The two of these enabled me to repay my debt quicker which puts me in this next predicament. My thoughts were similar to what you allude to, ensuring I stay within an affordable amount that can be repaid each month. Realistically, this is likely to mean swapping between the five cards I have each month. I understand that a closed account isn't necessarily seen as a positive. One of the recommendations from a credit reference agency is that I need a higher overall credit limit. This would mean requesting an increase on my credit limit/s or obtain a further card,  though this seems a bit odd?

YBR

Do you really need 5 credit cards now?
Consider cutting back to 2 (I'd choose one Visa and one Mastercard) and closing the others.

[Deleted User]

Iwillresolvemydebt said:

One of the recommendations from a credit reference agency is that I need a higher overall credit limit. This would mean requesting an increase on my credit limit/s or obtain a further card,  though this seems a bit odd?

The CRA recommendations are generally incorrect.  What are your current limits?

Iwillresolvemydebt

YBR said:

Do you really need 5 credit cards now?
Consider cutting back to 2 (I'd choose one Visa and one Mastercard) and closing the others.

Absolutely not! Realistically I only 'need' one... max. But I have read somewhere that closing accounts is perceived as bad. 

Iwillresolvemydebt

Deleted_User said:

Iwillresolvemydebt said:

One of the recommendations from a credit reference agency is that I need a higher overall credit limit. This would mean requesting an increase on my credit limit/s or obtain a further card,  though this seems a bit odd?

The CRA recommendations are generally incorrect.  What are your current limits?

6500
2800
250 (waste of time, I know but see reasons for keeping this far)

800 (also a waste of time) 
3000
The recommendation sent was that to improve my credit worthiness I need a limit of approx. 15k. Fuly appreciate this is likely nonsense, as such I am keen to know, should I just cancel these cards? If so, which would be the best to do so? 

[Deleted User]

That'll be TransUnion nonsense, I assume?  They tell everyone they should have a 15k limit.

Close on of the low limit cards if you really want to and keep the others. You may not need them, but it shows you're trusted and gives you back ups.  If you get offered increases, accept them, but never act on any of the CRA recommendations.

DCFC79

Which cards have you had open the longest ? 

Grumpy_chap

Iwillresolvemydebt said:

The recommendation sent was that to improve my credit worthiness I need a limit of approx. 15k. 

This seems to be a "magic number" used by one of the CRA's as there are many people that have posted so on here.  It is also the "magic number" of credit limit I am recommended to have by that CRA.  A cynic might suggest that this "magic number" has more to do with that CRA being a selling front for credit cards.

DaMoon

What does it actually matter? Keep them or close a couple. The main thing is not to use them again.