Should I leave my high-limit credit card open with zero balance?

alexanderalexander

I have today fully paid off the balance on a credit card which has a £25k limit. This leaves me with £37k of borrowing across seven credit cards which have a total credit limit of £70k.

I would now like to put myself in the best possible position to successfully apply for new 0% balance transfer credit cards. Would it be best for me to leave the credit card which I paid off today open with a zero balance (so that my credit file shows a lower credit utilisation percentage) or to close it (so that my credit file shows a lower total credit limit)?

MorningcoffeeIV

With balances like that, I wouldn't go closing anything.

Brie

Why apply for a new card?  Why not wait for one of your current cards to offer you a deal?  Or are you desperate for a deal now?

Generally from conversations I've had with banks is that they take all of your available credit into account when considering  offering new credit so while utilisation is important it would be the total £70k available that might be worrying and get you declined.  If as well they can see from your credit history that you have been getting regular BT deals and paying the minimum that might flag that you have a problem handling debt.  

If you close a card it's likely to be about 3 months for that to show on your credit history and your CC with the £25k limit may well offer you something in that time if you left it open.  My experience only but MBNA seem to be regulars at offering deals (most months), Santander less often (4,5 times a year), M&S occasionally (twice a year).  Haven't had one from Barclays in at least 5 years or more.

WillPS

MorningcoffeeIV said:

With balances like that, I wouldn't go closing anything.

Quite the judgment. Unlike the lenders, you've no idea if the OP is on the minimum wage or a 6 figure salary, nor how many dependents they have etc. This information (and everything else they ask for or get from credit records) will make a huge difference.

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OP - what does your affordability (just using the 'rough idea' checkers available on MSE or Compare The Market etc) look like today? Have your circumstances detiriorated, improved or stayed roughtly the same since you opened the card?

I personally close down all my BT cards once they've been cleared (unless there's another use for them) to have the best chance of getting a new customer offer with the same lender when I next want one. It's always a bit of a gamble but broadly speaking if you've good history with a lender and your circumstances have not changed negatively you can expect the same lender will probably (not definitely) be happy to do business with you again in future.

There's no right or wrong answers with this and you need to plan for the worst case (zero balance transfer availability) either way.

Nasqueron

All I would say, unless you are on crazy money and using BT to stooze or something, it's unlikely another provider will give you a 25k limit, let alone 70k - so does the 25k have any offers?

Martico

Brie said:

 My experience only but MBNA seem to be regulars at offering deals (most months), Santander less often (4,5 times a year), M&S occasionally (twice a year).  Haven't had one from Barclays in at least 5 years or more.

My experience - MBNA, Halifax, Virgin, Barclaycard pretty much continually have a BT offer open for me (BC and Virgin offer the best rates and longest times), and M&S only occasionally. 

daivid

alexanderalexander said:

I have today fully paid off the balance on a credit card which has a £25k limit. This leaves me with £37k of borrowing across seven credit cards which have a total credit limit of £70k.

I would now like to put myself in the best possible position to successfully apply for new 0% balance transfer credit cards. Would it be best for me to leave the credit card which I paid off today open with a zero balance (so that my credit file shows a lower credit utilisation percentage) or to close it (so that my credit file shows a lower total credit limit)?

Unless you are confident of a low or no fee BT card from that provider I think keep it. As others have said there is a good chance with many providers of a new BT offer on a cleared card. Until you do get a new offer it may be worth making a small monthly payment, that you pay in full, to keep the card active.

MorningcoffeeIV

WillPS said:

MorningcoffeeIV said:

With balances like that, I wouldn't go closing anything.

Quite the judgment. Unlike the lenders, you've no idea if the OP is on the minimum wage or a 6 figure salary

Clearly it's not 'quite the judgement'. If I had those balances I wouldn't close any cards.

Please don't assume that my decision is wrong or that I haven't thought about it. You have no idea what I earn. Even if I wasn't on a six figure salary, I wouldn't close them. If I were on minimum wage, I would understand that the chances of me getting further credit would be virtually non existent.

What the OP earns is irrelevant to my decision, as his income is not mine.

maxximus75

Answering the OP's question.

Keep the card open, especially if it's an old account.

Set it up to pay in full and put the odd spend on it to keep it active.

Hoenir

From a new lenders perspective. You've still got £33k of credit facility available to you. Why would you want more? There's far cheaper forms of finance available. Are you intending to go wild. Then default . (Said rhetorically no suggestion that you actually would). 

alexanderalexander

Thank you to everyone for your thoughts on this.

It seems that the consensus is that I should leave it open in the hope of being offered an "existing customer" BT offer. If none is forthcoming, however, I should close it. 

Let me know if anyone disagrees with this conclusion.