Haven’t used my credit card in a while. Is it worth keeping?

Chloboshoka_2

I haven’t used my credit card on a big purchase since last year. I’ve used it sparingly for little shopping bits online, but always was able to pay it off on payday. Now I wonder is it worth me keeping it and just carry on saving? 

I have a Barclays Credit card and have had this since 2015. I’m not sure what kind of benefits there are for me keeping it. 

eskbanker

Purchases of items over £100 benefit from section 75 protection, and all purchases enjoy a few weeks of cashflow benefit even if paying off in full, as recommended.  Regular use of the card will help your credit status, should that be important to you now or in future....

Old_Guys_Drool

One of the things that can affect your credit score is not only how much debt you have, but how much available credit you have. For example, if you have £2000 of  debt on a card with an £8000 limit, your credit score will be less adversely affected than someone with £1500 of debt maxed out on a £1500 card.

There's also benefit to be had in having a "rolling credit card" that you use for, say, your weekly shopping, that you pay in full every month (to avoid paying interest). Lenders like lending to people who actually use some of the credit available to them.

Maxing out individual cards should be avoided if possible (or even going over 50% of the limit).

How all this fits together can be a bit like witchcraft. In my case, I've got a couple of cards I used for balance transfers in the last few years, each with a limit > 8k and zero balance. I have a smaller balance transfer card which is at 50% utilisation. I have a card I use as a rolling credit card and aim to pay the balance monthly. Finally a card I only use when abroad as it has good exchange rates. Despite one card being 50% utilised, I have a maximum credit rating with all the agencies.

You could have a look at other cards that may offer benefits that could be useful to you and see whether you would get accepted for a more suitable card before considering whether to cancel your Barclays CC, but I'd be tempted to keep it anyway - it sounds like you don't treat credit cards as unlimited free money.

I hope this helps, but only you know your full financial position.

[Deleted User]

Old_Guys_Drool said:

One of the things that can affect your credit score is not only how much debt you have, but how much available credit you have. For example, if you have £2000 of  debt on a card with an £8000 limit, your credit score will be less adversely affected than someone with £1500 of debt maxed out on a £1500 card.

There's also benefit to be had in having a "rolling credit card" that you use for, say, your weekly shopping, that you pay in full every month (to avoid paying interest). Lenders like lending to people who actually use some of the credit available to them.

Maxing out individual cards should be avoided if possible (or even going over 50% of the limit).

How all this fits together can be a bit like witchcraft. In my case, I've got a couple of cards I used for balance transfers in the last few years, each with a limit > 8k and zero balance. I have a smaller balance transfer card which is at 50% utilisation. I have a card I use as a rolling credit card and aim to pay the balance monthly. Finally a card I only use when abroad as it has good exchange rates. Despite one card being 50% utilised, I have a maximum credit rating with all the agencies.

You could have a look at other cards that may offer benefits that could be useful to you and see whether you would get accepted for a more suitable card before considering whether to cancel your Barclays CC, but I'd be tempted to keep it anyway - it sounds like you don't treat credit cards as unlimited free money.

I hope this helps, but only you know your full financial position.

Credit scores are a worthless gimmick and are never seen by lenders

Ebe_Scrooge

Old_Guys_Drool said:

One of the things that can affect your credit score ... Your score is meaningless, as Farfetch says.  It's not used, nor even seen, by any lender
There's also benefit to be had in having a "rolling credit card" that you use for, say, your weekly shopping, that you pay in full every month (to avoid paying interest). Lenders like lending to people who actually use some of the credit available to them.  Mostly correct.  Lenders like to see a pattern of responsible borrowing and repayment.  So using a card regularly and ALWAYS paying in full every month builds up a positive credit history over time.

Maxing out individual cards should be avoided if possible (or even going over 50% of the limit).  Not true.  If you're carrying a balance on a card (which should always be avoided, unless you're on a 0% promotion), then having a balance that's close to your limit looks bad (basically it shows that you're struggling to repay your debts).  But if you're clearing the balance in full every month - as you should be doing - then it doesn't matter how much of your available balance you're using.

Despite one card being 50% utilised, I have a maximum credit rating with all the agencies.  Since agencies don't lend you money, their view of you matters not one jot.

A few points in bold above.  I'm not meaning to be argumentative, just trying to correct some common misconceptions that are widely believed by a lot of people.

Chloboshoka_2

At the moment I have no debt and all my credit available on the card. Perhaps it’s worth keeping for emergencies. 

But I do look at ways to boost my credit rating for when I want to get a house in the future. 

cymruchris

Chloboshoka_2 said:

At the moment I have no debt and all my credit available on the card. Perhaps it’s worth keeping for emergencies. 

But I do look at ways to boost my credit rating for when I want to get a house in the future. 

Don't worry about your rating or your score as has been outlined - but if you want a house - and a mortgage - then it's good to demonstrate that you can be trusted with credit. Therefore having an active, well managed credit card account will help contribute towards that. How do you pay for your day to day expenses? Do you use a debit card? If you're happy to be able to keep a handle on the spend - why not put your everyday shopping on the credit card, and then clear the balance in full once a month by direct debit. Only spend what you have. You'll be wanting to show the mortgage people that you know how to manage finance (even if you have £200k in the bank and don't need to).

andyf1980

What I do is to use my credit card for spending and immediately transfer the money I have spent to an account that I then use to pay the bill. 

At least you can get points/cash back that way and maintain a history of using a card well.