Should I close down zero balance cards?

Naomim

I had my true LBM in Nov 2019 and have been consistently paying down my debt.  I am lucky all my CC debt is on 0% interest after balance trasnferring which leads me to my question below:

I'm thinking I might need to start closing down some of my zero balance credit cards.  There are three MBNA cards, one Halifax card and one Tesco card all with zero balance.  I have approx £80k of credit available and I do not need that!

It might be handy to keep one MBNA as they do offer balance transfers and only have a 1% minimum payment fee. Tesco have not offered me any balance transfers for over a year  However, with a large amount of credit available and only owing approx £16.5k now, I wonder if I reduce the amount of available credit, will it look like I'm over leveraged?  

Any thoughts appreciated!

Naomim

Nasqueron

Ignore the effect on the fake credit score from "utilisation", CRAs love that metric for some reason, but some say 25%, some 30% some 50% which says it all - just made up nonsense.

Close cards that have no perks and no decent offers. I paid down a NatWest one and will clear a Tesco one this month, both have poor offers so I won't use them but they're tied to the YouGov finance thing earning me points so I can't close them until they allow you to change again! 

No harm in having around your salary in credit provided you have a good credit history and are clearing down the 0% balance. Personally I would do the following:

Close Tesco
If you can (I was able to but no guarantees) change the Halifax to a Clarity one for foreign travel
Ask MNBA about merging the 3 into 1 credit balance if they have good offers, else close 2 and keep the biggest limit

Naomim

Thank you.  I will start closing.

I have just been accepted for a 0% purchases card for a pre-planned largish purchase. (Funds already saved to pay it in full but thought I'd spread the cost). So I think it's a good idea to get rid of some that aren't offering me anything.  

[Deleted User]

I would try to convert your MBNA to their travel cashback credit card - that card offers 0.25% cashback along with being being forex free and would effectively negate the reason to retain/obtain Halifax Clarity. 

eschaton

I close credit cards as soon as they’re repaid. 

No point having available credit tied up in a card you don’t use. 

Use it to open a new card with free money. 

Honeystar

Just jumping in here as I’ve been paying off cards using 0% transfer deals and have cleared all but one. One now offers me a good 0% deal which I hope will clear the remainder. 

However I want to get a new 0% on purchases (larger purchases to spread cost) but I have cards with around 5 of the largest banks - all 0% purchase deals now expired.

Once closed, how long (if at all) do I get before applying for a new card? Or am I running out of options? 

enthusiasticsaver

I cannot see any reason why you would need 5 credit cards so yes I would close some of them down when they get to 0%. Having one or two is sufficient unless they are giving you things like cashback etc etc. 

Naomim

Thanks, already started closing them. 

Nasqueron

Honeystar said:

Just jumping in here as I’ve been paying off cards using 0% transfer deals and have cleared all but one. One now offers me a good 0% deal which I hope will clear the remainder. 

However I want to get a new 0% on purchases (larger purchases to spread cost) but I have cards with around 5 of the largest banks - all 0% purchase deals now expired.

Once closed, how long (if at all) do I get before applying for a new card? Or am I running out of options? 

It varies by firm and not all will tell you, once closed you should try an eligibility checker on the bank's own site not something like MSE and they should confirm if you will be able to or not. I posted just last week about Santander, the credit agency sites were recommending them after I closed the card but when I checked on their site, it said they could not offer me a card at this time, I did get one later without issue.

cantbelieveit23

I have a different angle on this question.  I have a wallet full of cards, most of which I haven't used for a number of years, with various credit limits up to £15k on one card.  I have paid bills in full each month for around 20 years. My partner and I normally only use two cards which give us some cashback, although I'm currently stoozing on a 15 month 0% purchases deal.  Does anyone know of reasons why I should keep any of these surplus cards, aside from maybe one with a high credit limit for emergencies? 

CliveOfIndia

cantbelieveit23 said:

I have a different angle on this question.  I have a wallet full of cards, most of which I haven't used for a number of years, with various credit limits up to £15k on one card.  I have paid bills in full each month for around 20 years. My partner and I normally only use two cards which give us some cashback, although I'm currently stoozing on a 15 month 0% purchases deal.  Does anyone know of reasons why I should keep any of these surplus cards, aside from maybe one with a high credit limit for emergencies? 

If the cards don't give you any benefits, and you're not using them, then you may as well close them.  Most banks will close the card accounts anyway after an extended period of non-use - simply because it costs them money to make the credit available to you, and if you don't use them then they're not making any money from you.

Although it's true that a long-established and well-managed line of credit is a positive mark on your credit history, that becomes less and less significant the longer the card goes unused.

So if you don't use them, close them.  There's even a chance you may get sent some 0% offers sent through in the future to try and tempt you back, though that's not really the primary objective.