Leave open or close?

tishmh

Is it better for your rating to have credit cards left open?
Iv currently got 3 not in use 
Am I better off closing them and then get one when I need one or leaving them open ?

CliveOfIndia

Uniquenation said:

Generally, owning a credit card is good for a credit score

Since your credit score is a meaningless number made up by the CRAs, and is not even visible to lenders, that's neither here nor there.

Uniquenation said:

having one card with low utilization helps enough to create a rating while high utilization can only damage it.

Again, the CRAs do like to harp on about utilisation, but it's only an issue if you're carrying a balance from month to month.  If you always clear the card in full every month, or if you're carrying a balance on a 0% promotional rate, it makes no difference to your "rating".

OP, if you're not using the cards then you may as well close them - most lenders will close the cards anyway after a long period of non-use (typically around 2 years or so).

In terms of your credit history, a long-standing and well-managed line of credit is viewed positively by lenders.  But if you're not using the cards then there's little to be gained by keeping them open.

Perhaps the only consideration might be the potential for future promotional offers.  On the one hand, if you keep the cards open then the lender might possibly send you an offer to tempt you back into using them.  Conversely, if you close them you might get offers arriving in order to tempt you back as a customer.  There's no hard and fast rule, it's purely down to each lender's marketing strategy at the time.

If you foresee yourself using the cards (responsibly!) in the near future then you could keep them open - saves the hassle of applying for a new card.  Having said that, if the current cards give you no particular benefit, you may wish to close them and try applying for a different card - when needed - that offers rewards of some kind (cashback, points, whatever).

But as always, you must only ever use a card for things you can afford, and you need to be repaying in full every month (unless you've got a 0% promotional rate in force).  Never look upon them as a magical pot of free money

silvercar

My Experian credit rating is slightly lower because of this. The Experian tip is to utilise between 1% and 50%. I’m not bothered about the slight dip in rating this causes and would prefer to have the credit card available to use.

You may decide to close one or two.

elsien

I’d keep at least one for emergencies, but if you don’t use them for prolonged periods, you will find that they cut the amount of money that you can borrow, which is not much help if you do need to use it. 

Your credit rating doesn’t matter if you don’t need credit, and companies go on your credit history anyway not on the random score that the credit reference agencies show you. 

Out of interest, why have you got three that you don’t need anyway?

molerat

Firstly, ignore what the AI bot replying has told you !

Tyjen

I had two credit cards one I use all the time and clear at the end of the month. The other one which was Sainsbury's I very rarely used, a while back I had a letter from Sainsbury's telling me they have cancelled my credit card as I was not using it enough!