To close one of my cards or not?

pinkjune

Hi I am wondering whether to close one of my cards?

First Direct - £2,500 limit (Current ac/t is with them)
Virgin - £2,400 limit  
Mbna - £6,000 limit
Sainsburys - £3,000 limit
Tesco - £10,700 limit
HSBC - £2,000 limit 

I just got the HSBC one on a balance transfer and have £1,900 on it. The rest I don't have any money on but they all approx 18-24% Apr apart from Tescos which is only 5% and has the highest limit, so I will be keeping that.

 Would it be better for my credit file to close one of them as I feel I have too many cards?

cymruchris

What stage of life are you at? Do you have a mortgage? Will you soon need a mortgage? Will you never need a mortgage?

Your overall limit of around £26k isn't over the top.  

There's nothing to stop you closing one or more cards - but keep in mind 'percentage utilisation' if you do carry a balance at any time. The lower the utilisation percentage the better within reason. 

If you're never going for a new big financial product like a mortgage - it doesn't matter if you close one. If you might take out a mortgage in due course though, some (not all) lenders like to see you have reasonable credit limits in place. 

WillPS

Which card is your oldest? I personally would keep that one open.

What benefit do you get from your First Direct, Virgin and MBNA cards? If the answer is 'nothing' then look to close them (except if one of them is your oldest account).  The reason for this is less to do with having too much credit, but having less options available should you need a new card from them in the future (e.g. as a balance transfer or purchase offer).

As for Sainsburys/Tesco - I presume you're using them for rewards? If so, that's a decent enough reason to keep a card open, although you might find you're not maximising your rewards potential with those products. An Amex will likely beat either of those cards, even when used at Sainsburys/Tesco! (There are also better earning Visa & Mastercard products.)

To me an optimal credit card portfolio has your oldest card, one or two cards with long term 0% balances (as and when needed) and then as many rewards cards are useful to you for day-to-day spending.