We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

Should I cancel an unused credit card before or after applying for a new one?

Options
I have two credit cards, one from Natwest which I used for a 0% purchase (stoozing), and one from Lloyds which I have had for 13 years which I very rarely use (the occasional purchase where I want consumer protection).

I now want to get a rewards card from Virgin, but I'm conscious having two credit cards already may impact the amount of credit they give me.

If I close the Lloyds account, will this increase my chances of acceptance/the amount of credit they offer me, or will closing it ruin my 13-year history of on-time repayments in full?

I'd hate to close it, only to be rejected by Virgin, and be without a card.
«1

Comments

  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    First Anniversary Photogenic Name Dropper First Post
    Options
    If you only have two, keep them both open.

    Once you get to nine or ten cards, you could think about closing one if you really felt the need 
  • purplebanna
    purplebanna Posts: 39 Forumite
    First Post First Anniversary Combo Breaker
    Options
    Reading on the Experian website it says:

    Try to keep old, well-managed accounts. Credit scoring looks at the average age of your credit accounts, so try not to chop and change too much.

    So on that basis, maybe I should keep it, and worry about my credit limit once I've got the card!

  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    First Anniversary Photogenic Name Dropper First Post
    edited 19 July 2022 at 8:41PM
    Options
    Ignoring any nonsense from Experian, keep both the cards, both before and after your application.
  • virgo17
    virgo17 Posts: 957 Forumite
    Name Dropper Photogenic First Post First Anniversary
    edited 17 August 2022 at 6:40PM
    Options
    Ignoring any nonsense from Experian, keep both the cards, both before and after your application.
    Totally agree. Experian and their  "credit scoring" my @rse.

  • cymruchris
    cymruchris Posts: 5,330 Forumite
    First Anniversary First Post Name Dropper Photogenic
    edited 19 July 2022 at 11:04PM
    Options
    Most card providers have eligibility checkers on their websites - Virgin do - use those to get a strong indication as to whether your application will be successful. (Don't use comparison sites).

    I wouldn't close either of your two existing cards even after getting a new one. 
    An ex-bankrupt on a journey of recovery. Feel free to send me a DM reference credit building credit cards from the usual suspects :) Happy to help others going through what I've been through!
  • [Deleted User]
    Options
    All I would say is solely as an anecdote, lenders I have used and been sensible with have been happy to increase my card limits over time, but I have noticed that on the initial application, the credit limit each new card I have taken out has been trending down. E.g. Barclaycard have upped my limit from about £4000 to £11,000 over 6-7 years or so, my most used cards have ticked up fine but the last couple of cards I took out, the initial offer was lowering e.g. Natwest was about £4-5k, M&S about £4k, Santander (most recent) was £2.5k so there is probably a point where they judge earnings vs available credit, weighed against past behaviour. Two cards is fine, having a third is a good idea
  • Marchitiello
    Marchitiello Posts: 1,266 Forumite
    First Anniversary First Post Name Dropper Combo Breaker
    Options
    All I would say is solely as an anecdote, lenders I have used and been sensible with have been happy to increase my card limits over time, but I have noticed that on the initial application, the credit limit each new card I have taken out has been trending down. E.g. Barclaycard have upped my limit from about £4000 to £11,000 over 6-7 years or so, my most used cards have ticked up fine but the last couple of cards I took out, the initial offer was lowering e.g. Natwest was about £4-5k, M&S about £4k, Santander (most recent) was £2.5k so there is probably a point where they judge earnings vs available credit, weighed against past behaviour. Two cards is fine, having a third is a good idea
    That is a good observations as I also believe it does reach a limit Vs earning (I normally have a combined CL of 125-150% of my income), but also there is a definite impact on what borrowing you already have in relation to your income (rather then % utilisation) as you may well have large saving and investment and at the same time have stoozed 50% of your income from CC, but they can only see the borrowing not the saving. 
  • Ebe_Scrooge
    Ebe_Scrooge Posts: 7,320 Forumite
    Name Dropper First Anniversary Combo Breaker First Post
    Options
    All I would say is solely as an anecdote, lenders I have used and been sensible with have been happy to increase my card limits over time, but I have noticed that on the initial application, the credit limit each new card I have taken out has been trending down. E.g. Barclaycard have upped my limit from about £4000 to £11,000 over 6-7 years or so, my most used cards have ticked up fine but the last couple of cards I took out, the initial offer was lowering e.g. Natwest was about £4-5k, M&S about £4k, Santander (most recent) was £2.5k so there is probably a point where they judge earnings vs available credit, weighed against past behaviour. Two cards is fine, having a third is a good idea
    there is a definite impact on what borrowing you already have in relation to your income (rather then % utilisation) as you may well have large saving and investment and at the same time have stoozed 50% of your income from CC, but they can only see the borrowing not the saving. 
    Exactly this.  Savings are not reported to the CRAs, and play no part in lending decisions.  Income vs debt is an important component of the scoring algorithms.
    Quite apart from anything else, you could declare - even prove - that you had a big pot of savings. Then as soon as you've been given the credit you applied for, you could go and blow your entire savings pot on a Ferrari and a world cruise :smile:

  • MalMonroe
    MalMonroe Posts: 5,783 Forumite
    First Anniversary First Post Name Dropper Photogenic
    edited 20 July 2022 at 5:43PM
    Options
    I agree with those who are saying don't close either, before or after. I've had some terrible financial trouble and I started a DRO about 9 years ago too. After pulling myself together, contacting StepChange and pulling my socks up, I now have three credit cards - Virgin, Tesco and Sainsburys with a joint credit limit of £10k. I only use a card to buy things I need (not want, very important difference) and then pay off the balance in full every month, as Martin has drilled into me. Sometimes I vary which card I use but also I sometimes 'freeze' one or other of them. At last I'm a competent money user (it only took about 65 years). Just have to remind myself that whatever the limit on any credit card, it is NOT my money. It isn't, right?

    I prefer to use a credit card also for purchases where I may want to rely on Section 75 in the future, you never know. I did once have a (successful) claim so it's worth doing. As long as the balance is paid off in full every month, as always.

    What cymruchris also says above, about not using comparison sites but using the credit provider's own website, is good advice.
    Please note - taken from the Forum Rules and amended for my own personal use (with thanks) : It is up to you to investigate, check, double-check and check yet again before you make any decisions or take any action based on any information you glean from any of my posts. Although I do carry out careful research before posting and never intend to mislead or supply out-of-date or incorrect information, please do not rely 100% on what you are reading. Verify everything in order to protect yourself as you are responsible for any action you consequently take.
  • purplebanna
    purplebanna Posts: 39 Forumite
    First Post First Anniversary Combo Breaker
    Options
    Thanks for the feedback all.

    I am surprised the consensus is to keep all three, so I will go with the advice.

    P.S. Last night I tried their eligibility checker and it says I am pre-approved. Happy days.
Meet your Ambassadors

Categories

  • All Categories
  • 12 Election 2024: The MSE Leaders' Debate
  • 344.1K Banking & Borrowing
  • 250.4K Reduce Debt & Boost Income
  • 450.1K Spending & Discounts
  • 236.3K Work, Benefits & Business
  • 609.6K Mortgages, Homes & Bills
  • 173.5K Life & Family
  • 248.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards