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Closing an old card vs not
I currently have 2 credit cards (both 0%):
Chase - NIL balance - £7k limit
Tesco - £2k balance - £6k limit
Should I close the Chase card as I'm not currently using it, and don't intend to in the future?
I'm just thinking of chances of acceptance for a new one, when the Tesco card ends, as my credit utilisation will go up (£2k balance with a £6k limit vs £2k balance with a £13k limit).
I'm a bit confused as heard conflicting advice.
Thanks
Comments
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In my opinion you should close a card if you know you won't be using it. It might take 3 months for this to be reflected on your credit history.
Your credit history will show your proper use of the Chase card for 6 years so that should help with any future credit applications. The fact that you have less available credit having closed the Chase card should make you look like a better risk to future creditors. The worry is that, if you kept the card, you might get a new card and then go wild and max out all 3 cards and get into a serious debt problem.
Don't forget that any creditor considering you as a customer will factor in all the other credit agreements showing on your credit history - monthly paid home/car insurance, phone contracts, overdrafts, catalogues, etc. And also remember that a stable lifestyle counts in your favour too - so register to vote, don't move frequently (i.e. a few times a year) and, supposedly, be married. (how they check that last one I don't quite know)
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⭐️🏅😇🏅🏅🏅🏅🏅🏅0 -
that’s really helpful. Thank you
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I had 10 CC £45k limit over the cards with debt of £12k (all either BT or purchase, no interest being paid), just applied and been accepted for number 11 (Nationwide) with a £3k limit. That's on UC & PIP.
Let's Be Careful Out There2 -
The amount of credit available doesn't really seem to be a factor in my experience, Halifax bumped my limit up from about £7500 - £12500 despite me having already £42k of credit (about 22% utilisation on BT offers + spending card is usually about 25%). Someone with a well run credit file who built their history of buying and paying off in full, at least from the algorithms perspective, is not the sort who would just run up debt all of a sudden so this "risk" is unlikely to be a real factor, anymore than the utilisation CRA nonsense
Sam Vimes' Boots Theory of Socioeconomic Unfairness:
People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.
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Crazy having 12k debt on UC & PIP,this how people go under by not settling the main debt and just keep on using balance transfers.
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Why not make money by bouncing debt along? The whole point is to have the money to pay the debt off in savings. I have 10k of debt on BT, about 20k in savings, £240 a year each Santander Edge saver interest, another £260 or so from NatWest digital saver etc
Sam Vimes' Boots Theory of Socioeconomic Unfairness:
People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.
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I agree. I'm stoozing on some of the debt covered by savings, but most of the debt has built up because of a PI claim
Let's Be Careful Out There0 -
I would personally always have at least one credit card that is free to use overseas like the Chase.
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Trouble is you keep on spending on the credit card and they want you to end up paying interest if something happens to your savings, one zero card is fine and then just swap it every 2-3 years for a new 0% spending card.
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Well on Universal credit savings start to be taken into account from £6k so you'd be losing money through tapering and receive no benefits by the time £16k in savings is reached. Obviously if all declared currently and run the risk when the gov do eventually catch up of trying to reclaim incorrectly claimed benefits if not fully declared. (Appreciate not your example but was in reply to an example on UC if the poster was stoozing the funds).
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