Should I close credit cards used just for stoozing?

Belenus

I have done a lot of stoozing on credit cards over the last few years.

I took out five cards that offered no fee balance transfers at zero interest for a period. I used those cards solely for stoozing. I use other cards for normal purchases and I always pay them off in full to avoid interest charges. Two of the stoozing cards are still interest free and I paid off the other three in full just before the interest free periods ended.

Should I now close those three cards and also close the other two when I pay them off or is it better to keep them? 

Perhaps after a year or so, if they are still offering stoozing opportunities, I will be able to successfully apply again.

The still in use cards are with MBNA and HSBC. The other three are with Barclaycard, Santander and Sainsbury.

Thanks

Ebe_Scrooge

It's always a toss-up.  On the one hand, long-standing, well-managed lines of credit are good for your credit history.  So, purely from the point of view of keeping/building a good credit history, it's best to use all of them regularly (in rotation, if that works better for you), and always repay in full every month.

If you close a card then future lenders will see that the card was closed.  But they won't know whether you voluntarily closed it, or whether the bank closed it because of account mis-management (although, they can see a history of spending and payments, so it's not such a big issue).

I guess the clincher is, as you say, the possibility of being offered further incentives as a "new customer" in the future.

Do you want a credit card for everyday use anyway?  Do any of the cards give you points/cashback/whatever?  If your "everyday spending" cards give you what you need, then you can probably close down the "stoozing" cards in the hope of getting more offers in the future.  I'd be tempted to close them one at a time over the space of a few months, just to minimise the impact on your credit history (which will be small, but you may as well err on the side of caution).

Bear in mind, when you do close a card then your credit score will almost certainly drop.  But as you're hopefully already aware, your score means diddly-squat so you can safely ignore any changes to that.

Belenus

Thanks Ebb for your comprehensive reply.

I do have credit cards for everyday use. I used to mainly use Amex who offered decent cashback but I switched to John Lewis Partnership Card a few years ago as their cashback deal was better, especially for John Lewis and Waitrose purchases. As John Lewis have closed the Partnership Card I now have a New Day John Lewis card with similar cashback.

A few months ago Amex closed my account on the grounds that it hadn't been used for a few years. Fair enough.

I also have a Halifax card for non sterling and overseas holiday spending.

I never check my credit score as I am aware it is largely meaningless. We are a retired couple with no mortgage or debts and plenty of savings and pension income so we are in the fortunate position of having no need for credit or loans. I did stoozing as a bit of fun more than anything. I put the temporarily saved money into premium bonds and other savings and I estimate that I have gained several hundred pounds over the last few years for very little time and effort.

I did apply for a Marks and Spencer two year interest free credit card a few months ago and was refused. My wife also applied for one and she was accepted. Our finances are closely linked with just the one joint bank account but all the stoozing cards were in my name only.  She is an additional card holder on my John Lewis card but she only has a Halifax card and now the Marks and Spencer card in her own name.

With hindsight perhaps we should have done some stoozing in her name too.

We should also perhaps get her a John Lewis card in her own name so she builds up more of a credit record in her own name in case something happens to me.

I think I will go ahead and close the unused cards.

Marchitiello

Ebe_Scrooge said:

It's always a toss-up.  On the one hand, long-standing, well-managed lines of credit are good for your credit history.  So, purely from the point of view of keeping/building a good credit history, it's best to use all of them regularly (in rotation, if that works better for you), and always repay in full every month.

If you close a card then future lenders will see that the card was closed.  But they won't know whether you voluntarily closed it, or whether the bank closed it because of account mis-management (although, they can see a history of spending and payments, so it's not such a big issue).

I guess the clincher is, as you say, the possibility of being offered further incentives as a "new customer" in the future.

Do you want a credit card for everyday use anyway?  Do any of the cards give you points/cashback/whatever?  If your "everyday spending" cards give you what you need, then you can probably close down the "stoozing" cards in the hope of getting more offers in the future.  I'd be tempted to close them one at a time over the space of a few months, just to minimise the impact on your credit history (which will be small, but you may as well err on the side of caution).

Bear in mind, when you do close a card then your credit score will almost certainly drop.  But as you're hopefully already aware, your score means diddly-squat so you can safely ignore any changes to that.

Not sure I agree with most of the above.

About closed accounts:
Cards or other credit account will show as settled when closed in good order, and makes a great deal of difference in underwriters assessments. I have said this before but I had a long dispute with my mortgage underwriters some years ago that gave quite an insight of what they can or cannot see, as for instance Barclays could not even ascertain that certain credit account they were concerned about were their own Barclaycard products, or detailed difference between  rolling balances and monthly balances paid in full.

With regards to use of cards:

the OP already said that he has and use other cards for real spending, so these cards for stoozing will be surplus to his credit worthiness requirements. As he also said that the balances have been paid out rather than transferred on, it would also have zero impact on his credit utilisation. 

Having clarified the above, I would say that if purely for future stoozing opportunities, you are better off just closing these cards and hope for similar offer in the future,  as for existing customers,  0% fee  Balance Transfer have been unheard of for some years and 1.99 to 4.5% fee for shorter length of time are more common. The one true question mark is the Credit Limit as the same bank that happily now give you a card with £10k limit, after you close it and apply again in a year time, may only offer you £5k.

MrFrugalFever

I’d keep the barclaycard open as they can and do offer money transfers, sometimes at 0% along with 0% BT offers (fee free) but it does seem like fee free offers are becoming a thing of the past.

Belenus

You may well be right that fee free offers are becoming a thing of the past. Could that be down to rising interest rates and inflation?

Barclaycard (and some others) do regularly send me balance and money transfer offers but there is always either a transfer fee of about 2.9% or interest of about 5% so I am not interested.

Marchitiello

MrFrugalFever said:

I’d keep the barclaycard open as they can and do offer money transfers, sometimes at 0% along with 0% BT offers (fee free) but it does seem like fee free offers are becoming a thing of the past.

There quite few 0% interest and fee offers for new customers right now, I would say the same amount there has been at any point in time for the last few years, but for existing customers they tend to offer 0% interest but with one off fee. I have had Barclaycard (more then one) for over 20 years and for many years they kept offering me new 0%  interest and fee dels as an existing customer but it has been over 6 years that all the 0% interest offers were paired to a fee.

as I said on another thread, when interest rates where between 3 to 6 % there were still many 0% offers as the banks do have some data around the amount of people that end up staying after that and paying the high interest as well those that miss a payment and lose the 0% deal, so they still make money out of it.