Cancel credit cards at the same time?

Tazza1984uk

Hi all,

you have probably heard this 1000 times before but I’ll ask as I need a little help. I have 6 open credit cards at the moment and have taken a loan to pay the balances off on 5 of these (6th card has a balance at 0% for another 20 months) APR were high 20s on most of these.  Question is I was looking at closing 4 of these cards at the same time as I will never use them and the APR rates are horrendous. Would it be sensible to close at the same time or keep the cards but never use? 2 cards I planned to keep are the 0% card which has a balance of 4k and my 7.9% card has 0 balance currently and may be useful in an emergency. Also not looking to take out any more credit / finance until my loan is paid off in 5 years time / hopefully sooner. (will look to try and buy a house once debt free)

Any help / advice would be appreciated. 

Thanks. 

maxximus75

It’s never good to close multiple accounts at once.

it can spook creditors.

if you want to close them, do it over a period of time.

If tou can trust yourself not to use them… I would rotate them.  Set them all up to pay in full and put a few small things on one car, that month then put that in a drawer and use a different one the next month etc etc

As you will be paying them off each month, in full it doesn’t matter what APR the cards are (remember to set up pay in full).

it will keep a positive history on your credit report and put you in good stead for your mortgage application.

If you feel like you may use them to spend then just cut them up.  Eventually, after a period of time the accounts may close for non-use but they will contribute to your credit history.

th081

Tazza1984uk said:

Hi all,

you have probably heard this 1000 times before but I’ll ask as I need a little help. I have 6 open credit cards at the moment and have taken a loan to pay the balances off on 5 of these (6th card has a balance at 0% for another 20 months) APR were high 20s on most of these.  Question is I was looking at closing 4 of these cards at the same time as I will never use them and the APR rates are horrendous. Would it be sensible to close at the same time or keep the cards but never use? 2 cards I planned to keep are the 0% card which has a balance of 4k and my 7.9% card has 0 balance currently and may be useful in an emergency. Also not looking to take out any more credit / finance until my loan is paid off in 5 years time / hopefully sooner. (will look to try and buy a house once debt free)

Any help / advice would be appreciated. 

Thanks. 

You have taken a consolation loan out and the risk is that you will build up the debt again. Lots do. Your original plan to close down the cards seems a good one, why keep them open for the sake of it.

Tazza1984uk

Thanks for the reply’s. Yes definitely don’t want to get into a mess with cards again. Taken a couple of years to get accepted for a loan with an APR well below the cards APR. 3 of the cards are 29.9% and one 15.9%. The 7.9% card is an ok rate for an emergency card but the rest are extremely expensive. Was a nightmare paying minimum each month and balances going nowhere. With the loan it’s reduced my monthly debt repayment and means I have a debt free end date as long as I’m sensible. Never want to be in the credit card trap again. 

Marchitiello

I would close the cards as you originally planned. It may have a small impact right when you do it but after some time it will normalise, and potentially what you have left open will increase your credit limit. 

However, unless it was one of those credit building card, I would select the card you have had the longest rather the one with the lowest APR, or to keep that open as well alongside the two you have selected, maybe reducing the limit to an amount that won’t tempt you to go indo debt again 

SanguineOnSaturn

A good idea is to create yourself an accurate budget both for monthly expenses and yearly expenses. Your income needs to be greater than your expenditure otherwise the debt trap will happen again. There should be allowance for saving into an emergency fund, that way you won't need to rely on borrowing for unexpected events. It takes a bit of time but go through your current expenditure and see where there is any leakage.

WillPS

maxximus75 said:

It’s never good to close multiple accounts at once.

it can spook creditors.

Mixing up absolutes "never" and possibles "it can".

I don't think either are true, FWIW, it all depends on context. Would be lenders can see the balance history of that card and others, it's not hard to pattern match when 0% deals end and a new balance transfer happens. They can even see that there was a promotional balance on the card for the time. Whether or not the lender will see closing paying up and closing down as a good thing (i.e. the accounts were managed correctly and the lender got their money back) or a bad thing (i.e. canny customer who moves on before money can be made) is really up to them; I've never noticed any difference in my ability to get the cards I want even when I've recently closed 3 cards at once.

To the OP - just do 'the right thing'. If you're not going to use the cards any longer, why keep them? If the answer is 'for credit scoring purposes' then know that it's a fools errand trying to work out what's objectively good and every lender is different. Be cool with the fact that you won't be attractive to all of them all the time.

daivid

Can you trust yourself to use one for regular spending and pay in full every month? If so keep one or two for this. Even if you only spend and repay £5 a month it will build positive credit history. If you can trust yourself with it keep the one(s) with the highest limit, but always pay in full! As for closing the cards; do you have any important credit applications coming up? If you do, particularly in the next 6months, I'd take a slightly cautious approach and close them in dribs and drabs. If not close as many as you want, any effect you closing your own cards on credit history will be short lived.

Tazza1984uk

Thanks for all the advice / comments. After having a think I’m going to close 4 of the cards. I’ll keep my 0% card as I’m still paying off a balance and my credit card from my bank I’ll use each month for fuel and payoff when statement arrives. I have no important credit applications to make in the near future so I’m now thinking best to close the cards now. 

th081

Tazza1984uk said:

Thanks for all the advice / comments. After having a think I’m going to close 4 of the cards. I’ll keep my 0% card as I’m still paying off a balance and my credit card from my bank I’ll use each month for fuel and payoff when statement arrives. I have no important credit applications to make in the near future so I’m now thinking best to close the cards now. 

I think you are doing the right thing. I would also echo what someone else said about doing a budget and seeing where your spending is going. It can be an eye opener and will help you get and stay out of debt. It is well worth the effort.

Tazza1984uk

th081 said:

Tazza1984uk said:

Thanks for all the advice / comments. After having a think I’m going to close 4 of the cards. I’ll keep my 0% card as I’m still paying off a balance and my credit card from my bank I’ll use each month for fuel and payoff when statement arrives. I have no important credit applications to make in the near future so I’m now thinking best to close the cards now. 

I think you are doing the right thing. I would also echo what someone else said about doing a budget and seeing where your spending is going. It can be an eye opener and will help you get and stay out of debt. It is well worth the effort.

I write down my monthly outgoings (started a few months back) and I now work to a budget each month. I used to be reckless. Things like gambling, going out several times a week and just generally wasting money on things I don’t need. Now this loan has cleared the cards I’m paying far less interest on the loan and have more spare cash which some will go towards paying my 0% card off. Also nice to see I have a debt free end date (was never ending with multiple credit cards / paying more in interest than repayment) Lesson learned I won’t be so stupid in the future. I’ve cancelled my 4 cards just waiting for closure confirmation. Shouldn’t take too long for the closures to be completed none of the cards have a balance. It’s a huge relief getting rid of the balances it seemed like I’d have the cards forever.