Closing Credit Card Account

Looper86

Hey,

Just looking for some advice when it comes to closing a credit card account and clearing the final outstanding balance. I’m currently in position of an Aqua card, the interest rate is nothing short of a joke at 39.9% apr, my last statement was £497.40 (car insurance) which I’ve made full payment for today but there is an interest charge to hit the account at the end of the period, meaning I’ll need to clear that next month, but if there is always an amount of interest to be added to the account how do I actually clear it (sorry finance isn’t my strong point and I’ve never owned a credit card before).

Basically, all I want to do is clear the balance and close the account as I have no need for £4,500 of available credit (and definitely not at such a high rate).

Thanks,

sparelogin

Once you cleared two statements in full, interest will stop.

Reconsider closing the card. There is no need to pay interest on it, and it will have many benefits to using it. However, you have to get your over spending under control.  That's the main reason your card has such a high rate.

phillw

I've rarely ever paid interest as most cards give you interest free as long as you paid the previous statement balance in full.
However my understanding is that it's usually charged daily, so contacting aqua for your balance and then doing a faster payment (so that they receive it the same day) should do it.

Looper86

sparelogin said:

Once you cleared two statements in full, interest will stop.

Reconsider closing the card. There is no need to pay interest on it, and it will have many benefits to using it. However, you have to get your over spending under control.  That's the main reason your card has such a high rate.

Ok great, so I’ll have one more statement and once that balance has been cleared then it will be able to be closed.

I have other avenues available to me should I require further available credit (MSE CC eligibility checker has just helped me choose a lower APR card with a £1200 limit) so I don’t see any need/reason to keep it open. I’m not sure what you mean by “get your over spending under control”, the card was used as the interest worked out marginally cheaper than the monthly repayments for the insurance and I could clear the balance in just a few months (which I have...), the card has a high rate because it was taken out when I was 18-19 as a means to build my credit score, aside from my annual car insurance it just sits in the safe.

sparelogin

That means you're using it wrong.

Your credit score isn't a factor in lending. Your credit history is.

You should be using it regularly and clearing in full each month.  

Once you have four or five cards with decent limits you might want to close it if you really feel the need, but in the meantime, you should be demonstrating that lenders trust you and than you can handle the credit responsibly.

maxximus75

The £1200 shown is just an representative example credit limit for illustrative purposes.  You limit actual will be known once you have made a full application for a card.

Some card providers such as MBNA, Nationwide, Lloyds, Halifax, Santander will show you an esitmated credit limit before

making a full application (just a soft search) but, you would have to do this on their own websites and not via the MSE checker).

If the card is the only credit you have, I would not close it so it can continue contributing to your credit history.  Pay off the next statement of trailing interest.  Set up the card to pay in full, by direct debit and use it for a bit of spending like fuel, etc.

You'll pay it off, in full each month and thus the interest rate doesn't matter as you won't be charged any interest and by doing so, helps towards a good credit history.

cymruchris

Another vote for not closing the card in order to build a positive history by using it often for a few purchases and then clearing in full every month by direct debit.

jimjames

If you change the DD setting to pay off it full every month then that should stop the interest accruing any further once the balance is clear