Should I cancel credit cards I no longer use ?

stueybuk

Hi all, I have probably half a dozen credit cards which I have applied for for various reasons including helping my credit, balance transfers and 0% finance. My question, should I cancel these if I no longer use them and will that affect my credit score favourably ?

MrFrugalFever

This has been discussed on numerous threads and the general consensus is to leave them and just use them periodically and pay off in full to maintain a long-standing history of on time and correct payments. 

Cancelling 1 or 2 may lower your ‘score’ but that’s just a gimmick anyhow.

cymruchris

Will you ever take another financial product? Will you ever need another mortgage? If so - keep them open and keep them used - paid in full each month with a few of your regular day to day purchases. 

If you're retired - house fully paid off - huge savings in the bank - then yes - you can likely close off a few cards.

It all depends on your circumstances - where in life you are - how financially sound you are - and your plans for the future.

binao

I closed several++ unused accounts a few years ago and now regret it.

blue.peter

cymruchris said:

If you're retired - house fully paid off - huge savings in the bank - then yes - you can likely close off a few cards.

I more or less agree. As it happens, I am retired, the mortgage is paid off and I have substantial savings/investments (not what I'd call huge, but more than enough for my current needs). I'm in the process of reducing the number of credit cards that I hold - did have six, will be down to three in a few weeks. However, I think that your first question is more significant:

cymruchris said:

Will you ever take another financial product?

I think it entirely possible that I'll be applying for other credit cards in the future, primarily to take advantage of cashback and/or 0% purchase offers. (If I ever go for the latter, it'll solely be for the purpose of stoozing.) For this reason, I want to keep a good credit history going: I will continue to use the cards that I'm keeping, and to pay them off on time. I'm keeping three, rather  than only two, to keep the total amount owed to a lowish proportion of the total credit limit.

It's also possible that I might want to move one or more of my current accounts. Again, any bank to which I apply will want to check my credit history.

My view is therefore that it's a good idea for pretty much anyone to keep, and use, a bare minimum of two credit cards (one Visa + one MasterCard), and possibly more. If I was the OP, I'd be doing some sums comparing my typical maximum amount outstanding with my total credit limit. Ideally, I'd like to keep the ratio below about 50% or maybe even 25%.

DullGreyGuy

binao said:

I closed several++ unused accounts a few years ago and now regret it.

Probably helpful if you explain why you regret it @binao


As always there are two sides to every coin... a benefit of closing can mean that in time you are eligible for new customer promotions again which are often better than existing customer promotions. Though these are more likely with some providers than others.

On the flipside, it helps reduce your utilisation rate and shows others have trusted you with credit that you've used responsibly/affordably. 

[Deleted User]

Buy on cards every few months and pay off in full - keeps the card active (12 months of inactivity they usually close the card anyway) 

If you want to benefit from new customer offers, sometimes they may allow you immediately, sometimes might be 6,12,24 months etc. There is no particular reason to close the card if they have use, I closed one (NatWest) as there were no useful offers and I would never use the card, customer services told me in chat I can apply as a new user immediately for offers but I take that with a pinch of salt. I do regret it in part because it was a possible DD I could have used towards a switch offer but it is long term probably better for me to close as a new customer offer is of more use.

I am in the same position with Sainsbury's now the nectar mastercard is only going to give 1 point per £2 spend, I am in two minds as to whether to close it and put all the spend on a cashback card or apply for the AmEx one anyway.

I have 5 other cards (3 running BTs, 1 generally unused which I put on for account switches) so wouldn't be a major loss as I have other Mastercards so an AmEx might be useful too but Sainsbury's did periodically give BT offers so a tough choice! 

horsewithnoname

if it helps, I've currently got 6 cards, 3 are cash back, so I keep those. 2 have balance transfers on them, and one I've had for 20+ years so I keep it.
I've had others over the years, for BTs, but then closed because they often have decent offers for new customers, Virgin, Sainsburys & M&S spring to mind for these.
But yes, close one, open one, do nothing at all and your credit score is likely to go up or down. But as its irrelevant, so what?

[Deleted User]

There are a two parties involved here; you and the issuer.
If you don't use them or use them sparingly then they may close or reduce the limit to a token amount. 

Yorkshire_Pud

stueybuk said:

Hi all, I have probably half a dozen credit cards which I have applied for for various reasons including helping my credit, balance transfers and 0% finance. My question, should I cancel these if I no longer use them and will that affect my credit score favourably ?

I like to close credit cards I don’t use especially if they are 0% cards that have lost that incentive. Life’s too short to keep cards open ad infinitum and play the game of the money men. My credit (joke) rating went really low when I had a large unpaid 0% credit debt, after paying it off and closing several cards my (joke) score went up to 999 over several months.
Its all so computers can make decisions on your financial health instead of people. They can get you know. Stand up for your mental health and good financial and psychic hygiene and bin those crappy cards (unless you want a mortgage I s’pose) 

stueybuk

Yorkshire_Pud said:

stueybuk said:

Hi all, I have probably half a dozen credit cards which I have applied for for various reasons including helping my credit, balance transfers and 0% finance. My question, should I cancel these if I no longer use them and will that affect my credit score favourably ?

I like to close credit cards I don’t use especially if they are 0% cards that have lost that incentive. Life’s too short to keep cards open ad infinitum and play the game of the money men. My credit (joke) rating went really low when I had a large unpaid 0% credit debt, after paying it off and closing several cards my (joke) score went up to 999 over several months.
Its all so computers can make decisions on your financial health instead of people. They can get you know. Stand up for your mental health and good financial and psychic hygiene and bin those crappy cards (unless you want a mortgage I s’pose) 

Problem is, I do need a mortgage !!! Thanks for your reply.