closing credit cards

evouguelad

need some information I have 4 credit cards which are nearly paid off as I haven't been using them what is the best advice when they are all cleared should I close them or keep them open I have had them over 5 years although I have never had large balances as I rejected increases but always kept them under 20% credit utilization id be grateful for advice  

MorningcoffeeIV

If you only have 4, keep them and use them.

cymruchris

Will you ever want a large credit facility in future? A mortgage for example?

Keeping them active and well managed (spending only what you'd normally spend on a debit card and paying off in full) will give you an ongoing positive credit history. That's useful.

If you're retired - mortgage paid off - never another financial decision to be made - then you could close one or two keeping a couple active for S75 protection on any larger purchases you may make.

Brie

what are the benefits of the various cards? 

I have one that gets me cashback which is used for everyday spending and paid in full every month.  There's a very high balance. 
I have another that is only used rarely when we are travelling as there are no foreign use fees and a good FX rate no matter where we travel.  Medium balance on this - as much as I might need on a holiday but could transfer more ££ to it to make it go further if needed. 
I have 2 others with ridiculously high credit levels which have only been used for balance transfers for the last 15 years.  Now that I'm unlikely to need BTs again (i hope) I might shut those 2 down just to be tidy. 
I've got another card that has a very low credit (£1200?) but allows priority booking of some concerts/events.

So each has a purpose and I don't care if I have some of them or not as my credit history is somewhat irrelevant at this stage of my life (flex mortgage essentially zero and only left open in case I need equity which is unlikely.)

lr1277

If you don't use a particular card for a certain amount of time, then it will be closed by the provider. When this has happened to me, I got no warning, but this was some years ago.

It is possible the card will be closed by the prrovider. This is more likely with cards that are co-branded. In my case I had 2 cards closed. 1) The John Lewis partnership card which was a partership of John Lewis and HSBC. A replacement card was offered by a different provider; but in my case, my income had drastically dropped so I could not apply for the replacement. In the other case, I had the Post Office which initially was co-branded with Bank of Ireland but then sold to Jaja. This card was closed by Jaja with no alternative offered.

So if you are confident about your ability to manage the cards, then I would keep some or all the cards. If you are not confident about your ability to manage the cards but are confident about your income going forward, the I would close as many cards so that the remaining cards give you the credit limit you need.

Btw: in my view co-branded cards are more likely to be closed by the provider rather than cards provided by the actualy financial provider like a bank.

WillPS

lr1277 said:

Btw: in my view co-branded cards are more likely to be closed by the provider rather than cards provided by the actualy financial provider like a bank.

All credit cards, other than Nationwide's, are provided by a bank. In the case of a 'co-brand', the brand is lent.

It's also far from certain that lapsing co-branded cards get closed too, in the last few years we've had:

• IHG/Creation card - reverted to being a standard Creation card earlier this year
• Amazon/NewDay card - mostly migrated to NewDay Pulse, those who weren't seemed to be offered it when asked
• Debenhams, House of Fraser, Arcadia NewDay cards - same as above
• AA and Post Office Bank of Ireland cards - sold to Jaja
• Costco/Amex card - reverted to being a standard Amex Plat Cashback Everyday
• Asda/Creation card - reverted to being a Creation card, some even had 1 or 2% cashback thrown in
• Various airline MBNA cards - pushed over to MBNA Horizon
• IHG/Barclaycard - reverted to a standard Barclaycard Platinum

I'm sure there are others too which I've forgot. Of course, the rub here is that often these cards no longer have the perks which drew the applicant in the first place; but the account itself is still there with the bank.

lr1277 said:

If you don't use a particular card for a certain amount of time, then it will be closed by the provider. When this has happened to me, I got no warning, but this was some years ago.

It is possible the card will be closed by the prrovider. This is more likely with cards that are co-branded. In my case I had 2 cards closed. 1) The John Lewis partnership card which was a partership of John Lewis and HSBC. A replacement card was offered by a different provider; but in my case, my income had drastically dropped so I could not apply for the replacement. In the other case, I had the Post Office which initially was co-branded with Bank of Ireland but then sold to Jaja. This card was closed by Jaja with no alternative offered.

You got a bit unlucky with the JL card - I suspect the fact the card agreement was in fact with John Lewis Financial Services rather than HSBC UK directly was a contributing factor in that. The only other card in a similar position to this one which remains on the UK market is the M&S ones, which I suspect are also at high risk of a rug pull when the M&S Bank branding license eventually goes.

The Jaja situation is a bit more unusual in that they purchased the entirety of a UK retail bank's card portfolio (albeit not one with a GB presence). It should be noted that even the holders of Bank of Ireland branded BoI cards were affected here, so again not really a co-branding risk issue.

lr1277

Slightly off-topic from the OP's question.

I don't think I was unlucky with the John Lewis card because an alternative was offered. It was only my own (self-genrated) circumstance that prevented me getting the alternative. Which is why I asked the OP if they were confident about their income going forward and their card management skills. If both show no problems, then they should have no problems getting a card should they desire.

Jaja did not offer an alternative, which wouldn't have made a difference to me given my income situation. But that was a poor show from Jaja.

But I suppose in either case, the card holder would have had to apply for another card should they have wanted the credit facility.

Edited to add: so I suppose my overall point is if the OP foresees a situation where they may have a reduced income in the future, then hold onto as many cards as they feel comfortable with because you (usually) don;t have to submit your income details once you have a card. Though anecdotally it looks like Amex on occasion ask you to submit your income details even after you are a cardholder.

WillPS

lr1277 said:

Slightly off-topic from the OP's question.

I don't think I was unlucky with the John Lewis card because an alternative was offered. It was only my own (self-genrated) circumstance that prevented me getting the alternative. Which is why I asked the OP if they were confident about their income going forward and their card management skills. If both show no problems, then they should have no problems getting a card should they desire.

Jaja did not offer an alternative, which wouldn't have made a difference to me given my income situation. But that was a poor show from Jaja.

But I suppose in either case, the card holder would have had to apply for another card should they have wanted the credit facility.

Edited to add: so I suppose my overall point is if the OP foresees a situation where they may have a reduced income in the future, then hold onto as many cards as they feel comfortable with because you (usually) don;t have to submit your income details once you have a card. Though anecdotally it looks like Amex on occasion ask you to submit your income details even after you are a cardholder.

JLFS didn't offer you another card - there was no option to continue your existing credit card agreement, unlike all the other co-brand license examples listed above. The fact John Lewis took a new partner and invited you to apply is neither here nor there, there was no 'continue' option.

As I mentioned previously Jaja binning off the majority of the their Bank of Ireland derived customer base was quite unusual and affected Bank of Ireland (retail) customers as well as customers who (previously) held AA and Post Office branded products. Any lender could decide to close their UK credit card arm altogether, or massively shrink their portfolio, or decide certain customers are too risky.

Amex are quite proactive about asking for customer income details but all lenders have to abide by the same regulations, other lenders will be doing the same in time.

No such thing as a "card for life", same as anything else nowadays.