Should I cancel an unused credit card before or after applying for a new one? 19 July 2022 at 7:03PM in Credit cards 15 replies 628 views

[Deleted User]

purplebanna said:

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.

You will see on the thread on here about how many cards people have, 3 is fairly normal for money savvy people, I have 6 at the moment having just closed a 7th that I was not going to use again as it had no benefits and the BT offers were rubbish

daivid

purplebanna said:

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!

With regards to the bit in bold, I read on here that that means spending, and repaying in excess of the minimum each month. I have 3 main cards Amex (reward card) which I use for everything I can, then a visa and a mastercard that I alternate when amex isn't accepted. All are on full repayment DD. If I've not yet used a non-amex card towards the end of the month I will put a small purchase (that I would make anyway) on it to make sure it is used. How much this actually matters I'm not sure but once the DDs are set up it takes no effort.

Ebe_Scrooge

daivid said:

purplebanna said:

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!

  I read on here that that means spending, and repaying in excess of the minimum each month.

Actually, you need to repay the full amount each month, not just "in excess of the minimum", in order to maximise the "positive ticks" on your credit record - and to avoid paying interest.  Paying anything less than the full amount can give the impression that you're struggling to repay what you owe (this applies to an ordinary interest-bearing debt - if you've got a 0% promotion then paying the minimum as fine, as long as you clear it when the promotional rate expires).

daivid said:

purplebanna said:

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!

If I've not yet used a non-amex card towards the end of the month I will put a small purchase (that I would make anyway) on it to make sure it is used. How much this actually matters I'm not sure but once the DDs are set up it takes no effort.

Using it and paying in full will always be seen as a positive.  You don't have to use the card every month, necessarily, but an occasional purchase every few months will keep the card active.  Many lenders will close the account after a long period of inactivity.

noh

My experience is that I haven't bothered to close, over the last 10 or so years, any existing credit cards when applying for new ones. Some have been closed by the provider due to lack of use.
I currently have 18 CC accounts only 3 are used regulary total limit is around £115k which is nearly 400% of my income.
There are not many cards I can apply for that I haven't already got but i still seem able to get new CC accounts if I apply which I do from time to time if there is a 0% offer from a provider I have not got an account with..
I do need to get round to closing some of the accounts!
It's not the number of cards you hold it's the lenders assesment of your credit history that matters.

Marchitiello

Ebe_Scrooge said:

daivid said:

purplebanna said:

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!

  I read on here that that means spending, and repaying in excess of the minimum each month.

Actually, you need to repay the full amount each month, not just "in excess of the minimum", in order to maximise the "positive ticks" on your credit record - and to avoid paying interest.  Paying anything less than the full amount can give the impression that you're struggling to repay what you owe (this applies to an ordinary interest-bearing debt - if you've got a 0% promotion then paying the minimum as fine, as long as you clear it when the promotional rate expires).

daivid said:

purplebanna said:

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!

If I've not yet used a non-amex card towards the end of the month I will put a small purchase (that I would make anyway) on it to make sure it is used. How much this actually matters I'm not sure but once the DDs are set up it takes no effort.

Using it and paying in full will always be seen as a positive.  You don't have to use the card every month, necessarily, but an occasional purchase every few months will keep the card active.  Many lenders will close the account after a long period of inactivity.

This depends from how the CC will report to the Credit Agencies.. in speaking to Underwriters directly few times, they could not see that the balance was paid in full, only that my Amex had a rolling balance of several thousands GBP every time it was reported. There is indeed a flag for min payment but not sure one for paid in full. 

As a matter of fact I have just checked my Experian reports and in the last three years have three “Minimum” payment flags in my records for the Amex account, and all three times it was when the balance was approximately £5 or less, which meant that the minimum payment on the statement was equal to the full balance, and they still put the min payment flag!