Is having too many credit cards a bag thing

CoreyLewis96

Good evening

I am just looking for opinions or help. 

I currently have 4 credit/purchase/balance transfer cards which I opened all within 12 months, which I have managed to reduce my debt from £6,000 to £2,000. All of these cards have a limit of £1,000-£2,000

1st of the balances is £200.00 - interest free due to end in 2 months. - this is m&s bank 

2nd £800, interest due to end in 6 months - this is Halifax bank 

3rd £1,000. Interest due to end in 11 months (most recent). - this is Vanquis

4th is just my normal standard credit card but the balance is £0.00 and I have had this for 10+ years. 

I have just been pre approved (not applied or I have not accepted) for a £5,000 purchase and transfer credit card from NatWest. I have no intentions to purchase as I want my debt to £0.00 but only only to transfer everything over to one rather than making payments through 3 cards. 

My biggest fear is how awful my credit score is going to be when I remortgage in 3 years time and possibly not be accepted for a re mortage?. I’m hoping it’ll all be paid off but I can imagine with a 5th credit card that this is going to look really bad?. 

Should I just stick to what I’m doing?.

Thanks. 

eskbanker

CoreyLewis96 said:

My biggest fear is how awful my credit score is going to be when I remortgage in 3 years time and possibly not be accepted for a re mortage?. I’m hoping it’ll all be paid off but I can imagine with a 5th credit card that this is going to look really bad?. 

Prospective lenders aren't interested in the number of cards you have as such, but are interested in things like total debt and total available credit (giving a utilisation ratio), and affordability in the context of credit/debt versus income.

Consolidation isn't the big win some perceive it as, but if you've already reduced your debt from £6K down to £2K and still have 0% deals on multiple cards for now, how long will it take you to finish paying them off?

magpies79

I'll try lend some advice from what I've pick up from here I'm sure someone will correct me if I'm wrong.

firstly credit score means nothing it's a made up number and will have no bearing what so ever on your remortgage your history however will on missed payments late payments debt and income etc etc.

Another thing is if you are not moving lenders and staying with the one your with for your remortgage and are just looking for a new deal they don't tend to do a credit check I believe.

As for the cards from what I've been told on here having a card over a long period of time is good and will been seen as a positive on your credit file having a few cards will be fine having multiple hard searches over a small period can spook things a little when applying for other credit.

Also having cards that don't carry balances and not being close to your limits is also a good thing 

steven141

magpies79 said:

I'll try lend some advice from what I've pick up from here I'm sure someone will correct me if I'm wrong.

firstly credit score means nothing it's a made up number and will have no bearing what so ever on your remortgage your history however will on missed payments late payments debt and income etc etc.

Another thing is if you are not moving lenders and staying with the one your with for your remortgage and are just looking for a new deal they don't tend to do a credit check I believe.

As for the cards from what I've been told on here having a card over a long period of time is good and will been seen as a positive on your credit file having a few cards will be fine having multiple hard searches over a small period can spook things a little when applying for other credit.

Also having cards that don't carry balances and not being close to your limits is also a good thing 

From what I've seen is that anything less than 25% balance of your credit limit affects your credit score. I think that lenders like to see you using your cards and paying them off in full although providers all have their own criteria and some may not lend to someone who they think they won't make much money from and people have had credit limits reduced. It all comes down to what each lender wants and nobody knows what their criteria is and this could change.

CliveOfIndia

steven141 said:

From what I've seen is that anything less than 25% balance of your credit limit affects your credit score. I think that lenders like to see you using your cards and paying them off in full although providers all have their own criteria and some may not lend to someone who they think they won't make much money from and people have had credit limits reduced. It all comes down to what each lender wants and nobody knows what their criteria is and this could change.

Just to clarify a few points.

Firstly, your score is utterly meaningless.

Secondly, if you're paying the balance off in full every month then it doesn't matter what percentage of available credit you're using (despite what the CRAs would like you to believe).  It only becomes a factor if you're carrying a balance from one month to the next on an interest-bearing card.  If you have a 0% promotional rate in force then this is flagged as such on your credit record, so carrying a balance in that scenario is less of an issue.

Thirdly, you're correct in saying that a lender wants to make money from you, of course they do.  But this doesn't mean you need to pay interest.  Yes, if you pay interest they aren't going to complain - but if you clear the balance in full each month, they still make a nice steady income from the fees they charge the retailer every time you use the card.  But if you use the card only infrequently then they're not making much in the way of merchant fees, and will often reduce your limit in that scenario.  They only have a finite amount of credit available to dish out, so they will naturally offer it to those customers who will make use of it.