Keep older credit card or ditch?

spinningsheep

After what seems like a lifetime of being in a cycle of debt and a terrible credit rating, I'm finally on the way to getting out of it.

When covid hit, I was suddenly left in a position of living alone in a house I couldn't afford on my own, and the situation just got worse. I was living on my credit cards to get through to the end of the month. Thankfully I managed to maintain my minimum payments and avoid defaults or worse.

Fast forward, I'm now back living with my parents, saving for a mortgage & have paid off all my historical debts, my old satisfied CCJ falls off in early 2024, and old defaults fall off in Dec this year, and my situation seems bright in comparison to say 6 months ago. 

I've managed to save £3000 in few months I've been back at home, and aim to have a minimum of £20,000 deposit saved by the back end of next year. 

I have a total of 8 credit cards. All bar one paid off in full each month if I use them. I tend to use for small amounts, just to keep utilising them. Most have been open for a year or two and limits have been increased gradually. 

Capital One - limit £1100 (oldest card) 

Zable/Level - limit £1000

118118 - limit £1200 (second oldest card) currently has a £150 balance 

Marbles - limit £450 (purely use for petrol)  

Zopa - limit £300

Keebo - limit £200

Asda Money (Newest card and lowest APR at 26.5% and my first non targeted subprime card) starting limit £1000

My thoughts are to close Zopa and Keebo. Both tiny limits and they've done the job of helping me to build a better history. In fact Keebo doesn't even reflect on my credit reports at all. 

I'm also minded to close the 118118 card as the monthly fee in lieu of interest had now increased to £20, even with a zero balance. 

Would then keep Asda, Cap one, Marbles and Zable. 

Would this be wise? Or would the 4 cards be a red flag come mortgage application time in early 2024? I appreciate this a while away but I want to be in the best possible position when the time comes. 

Thanks in advance for any input. 

daivid

Others know much more than I and may advise soon. To me closing the 118118 card is a no brainer £240 a year for what? Also your post suggests you are paying interest on one card but your savings exceed any of the credit limits, if so pay the card off as you are not getting 26.5%(your lowest apr)+ on your savings. 

Generally old, well managed credit is good, and multiple cards are fine. From what regularly comes up on here 4 is by no means excessive, (I have 10: 3 I use regularly just to have Amex, Mastercard and Visa, then the rest to are 0% cards either being payed off before the deal ends or already payed off but not yet closed). When I first got a mortgage I think I had 5 cards, when I remortgaged 6 or 7 - all were payed off/well managed and I had nothing negative like a default or ccj.

In your situation I think I would cut to the 4 you suggest now, then apply for a better card (cashback or higher limit if that is useful) when eligibility scores are good (direct with the provider) though only go for a new card if you are sure you will be paying off in full. In the 6 months before you plan to apply for a mortgage (early 2024 I assume) try to limit your credit applications as much as possible

WillPS

Keep the oldest and the Asda. Can't see any reason to keep the rest, unless those 2 don't provide you with sufficient credit between them?

Certainly get the 118 card closed ASAP.

Chrysalis

I would keep capital one, and either one or both of the £1000 cards, ditch the rest.

spinningsheep

Thanks for all the input folks. I've decided to close the Keebo, Zopa and 118118 cards. By chance, today, I also had a credit limit increase on the Marbles card to £1200 from £450 (3rd statement)

Feel really positive now about my finances, first time in a VERY long time. 

Once again thanks for the input! 

[Deleted User]

Good luck. Have you got a legacy 118118 card as the current version (their website is awful) seems to have a standard subprime APR and no other charges. Can you swap to this?

older_wiser

Deleted_User said:

Good luck. Have you got a legacy 118118 card as the current version (their website is awful) seems to have a standard subprime APR and no other charges. Can you swap to this?

the newer 118 118 card not the legacy one is actually quite good i got mine around 3 years ago or so while i was still building my credit file  i hardly use it now the odd transaction to keep it from going dormant. 

no withdrawl fees for cash 
no overseas transaction fees 
no late payment fees 
good exchange rate 
no cash transaction fees 

afew other things i can't recall 

the funny thing is that at the time people with excellent credit history were complaining that they couldn't get the card and were being declined while people with less than pristine credit history were being accepted.

Lots of other cards have these advantages now but 118 118 were being critisised at the time for charging a fee for using a credit card rather than intertest so they launched this to counter the criticism. 

in the not too distant futire i'm going to start cutting the amount of credit cards i have while i don't use the 118 card very often i don't know whether it will be on the list of ones to close. 

 

[Deleted User]

There is no harm in having multiple cards, indeed, paying many off in full every month is better than having 1-2 that are heavily used as the credit utilisation figure looks better - this is one of many factors lenders use when assessing your credit - obviously ignore the gimmick score.

I'd be minded to look for more advantageous cards if you can get them though, cash back or points is no bad thing

spinningsheep

Deleted_User said:

There is no harm in having multiple cards, indeed, paying many off in full every month is better than having 1-2 that are heavily used as the credit utilisation figure looks better - this is one of many factors lenders use when assessing your credit - obviously ignore the gimmick score.

I'd be minded to look for more advantageous cards if you can get them though, cash back or points is no bad thing

Thanks Farfetch, I took your advice. I did an eligibility check via clearscore and was accepted for Amex BA Avios with a £1000 limit!

Will be closing 118 card (when I get home from my holiday I'm on now, £0 fee overseas in case of emergency so decided to delay it a month) and Zable immediately, already closed Keebo and Zopa. Will be spending nominal amounts and paying in full on my remaining cards I leave open to still show utilisation.

I've learnt the hard way what a poor credit history means and will not be headed down that path again. 

spinningsheep

Deleted_User said:

Good luck. Have you got a legacy 118118 card as the current version (their website is awful) seems to have a standard subprime APR and no other charges. Can you swap to this?

I called them and was told I would have to close the account and reapply in 6 months to swap to the standard APR card, so I'll be waving them bye bye. I can't complain, they accepted me for a card when others wouldn't touch me with a muddy stick and it's done it's job of building my history to the point now I have non sub prime cards I'm being accepted for, it's been a long journey but was worth it! 

[Deleted User]

spinningsheep said:

Deleted_User said:

Good luck. Have you got a legacy 118118 card as the current version (their website is awful) seems to have a standard subprime APR and no other charges. Can you swap to this?

I called them and was told I would have to close the account and reapply in 6 months to swap to the standard APR card, so I'll be waving them bye bye. I can't complain, they accepted me for a card when others wouldn't touch me with a muddy stick and it's done it's job of building my history to the point now I have non sub prime cards I'm being accepted for, it's been a long journey but was worth it! 

Seems silly to lose your custom but that's their prerogative as a business. Did you ditch the Marbles card? Either of the Amex Avios (can convert to Nectar points) or Asda card will give you rewards for petrol; Marbles has a low limit and no spending benefits.