Close credit card after 0% period ends?

The_Groat_Counter

I've a Barclaycard credit card which had an interest free period for purchases that is coming to an end, and I've cleared the balance. Are there any downsides to now simply closing the account, as from Barclaycard's point of view I will have just 'used them and then dumped them' without them having made much money from me (to be clear I'm not shedding any tears from them!).

The alternative is perhaps keep the account active for a while (say six months or a year), and use it for a few purchases before later closing it (paying off in full each month). Just thinking about the algorithms that might be in play, as I may wish to apply for a Barclaycard again at some point the future and so would prefer to avoid being marked down in their records as a customer that's 'not worth it'.

And would a similar calculus apply for closing a credit card at the end of a 0% balance transfer period (again with the balance having been cleared) - i.e. better to keep it open for a while and use it a little before closing it?

I appreciate different companies operate in different ways, but just wondering if there is any broad-brush advice on this scenario?

Many thanks.

Brie

I can't see any downside if you don't actually need the card now.  Barclaycard won't care.  And actually it will likely set you up nicely for when you want another card for some future 0% fun in a year or whenever.  

That said - this assumes you have another card you can use for regular purchases or holidays or whatever.

The_Groat_Counter

Thanks for the response. Yes, I do have other credit cards (plural) already.

In fact I also have another credit card from Barclays, a Tesco Bank credit card - as last year, Barclays bought the Tesco Bank business. The back office systems will take some time to be integrated (and presumably however Barclays manage this, there will be at least some degree of integration) - I imagine this would mean that in the future, any Barclaycard I might apply for and be offered would also be assessed on the basis of how I managed my Tesco credit card account.

I also note the comments in this MSE forums thread from 2023, in particular the comment that having "an available but unused credit limit shows you can be trusted with large credit limits", which is something to bear in mind (the Barclaycard limit being reasonably generous).

The other factor is that I might close an unused AO Finance credit facility (which is run by Newday), partly in the hope of increasing my credit limit on an Aqua cashback credit card I hold (which is a Newday brand)  - closing off two lines of credit in quick succession might not look great on my credit history.

Olinda99

I believe if you close a Barclaycard you have to wait 6 months before you can apply for a new one.

One option might be on the app to change your card type to something else for example a cashback card

this means that at some point in the future you may be able to change the card type back from cashback to a new 0% card !

Brie

The_Groat_Counter said:

I also note the comments in this MSE forums thread from 2023, in particular the comment that having "an available but unused credit limit shows you can be trusted with large credit limits", which is something to bear in mind (the Barclaycard limit being reasonably generous).

The other factor is that I might close an unused AO Finance credit facility (which is run by Newday), partly in the hope of increasing my credit limit on an Aqua cashback credit card I hold (which is a Newday brand)  - closing off two lines of credit in quick succession might not look great on my credit history.

Yes I've heard that before about keeping an unused card.  But in my experience creditors will also wonder if you're going to rush out and use it thus making any new credit they give you unaffordable.  You need to be able to service not just the debt you have but all the available credit.  

I'd be considering getting rid of the less prestigious cards (Aqua etc), keeping some of the Barclays credit and then looking to apply for a new deal with an unrelated bank at some point in the future.  

Then again I've got an MBNA card that hasn't been used in about 4 years but I'm hanging on to "in case" because it's got a £20k credit limit.  And offers 0% deals almost constantly.  I'll close it at some point or at least decrease the value unless I decide to buy a new (to us) car or similar.

Uriziel

Your credit rating ususally decreases when you close a credit card but apart from that there is nothing from stopping you closing the card. If you close it and apply again after a month you would probably be rejected. Usually you need to wait a year after closing an account to be eligible for new customer offers again.

Nasqueron

Uriziel said:

Your credit rating ususally decreases when you close a credit card but apart from that there is nothing from stopping you closing the card. If you close it and apply again after a month you would probably be rejected. Usually you need to wait a year after closing an account to be eligible for new customer offers again.

The fake score changing isn't a concern

Nasqueron

I'd keep the card open, Barclays often offer me new BT or MT offers that can be used. I got a 2 (maybe 18 months?) year MT offer for 3.3% fee, whack the money in a good interest rate account and you're laughing

The_Groat_Counter

Thanks all, food for thought.

granta

Nasqueron said:

I'd keep the card open, Barclays often offer me new BT or MT offers that can be used. I got a 2 (maybe 18 months?) year MT offer for 3.3% fee, whack the money in a good interest rate account and you're laughing

I've been offered this in the past too but didn't proceed as I thought 3.3% fee was really high. Is there a way to maximise the offer that I haven't thought off?

Nasqueron

granta said:

Nasqueron said:

I'd keep the card open, Barclays often offer me new BT or MT offers that can be used. I got a 2 (maybe 18 months?) year MT offer for 3.3% fee, whack the money in a good interest rate account and you're laughing

I've been offered this in the past too but didn't proceed as I thought 3.3% fee was really high. Is there a way to maximise the offer that I haven't thought off?

Purely down to risk profile, I thought 3.3% was good enough to use, have the money in the Santander Edge earning 6%, as it's over 20 months (I checked) then I get a good whack of interest that covers the fee