Should I keep cards free for the future?

patwa_2

Hello,

I have started thinking about finances for this year. The main issue I'm having is whether or not to keep the number of credit cards I have (soon to be freed up from balance transfers) or to get rid of most of them. On the one hand, I've read that cancelling cards can improve your credit rating as it indicates less debt. On the other, I've been told it can improve your attractability as it indicates lenders feel you are a 'good risk', plus it's going to get harder to get credit in the future.

My current situation:
I have a Student Mastercard which I use for small purchases (post office mainly) which usually has <£40 of a balance each month and which I clear in full.
I have a Visa with a high limit (for my income) which I use for my larger purchases, including the £150+ weekly transport costs.
I have two cards currently on 12 month 0% balance transfer offers which will reach the end of the 12 months in March 2008. I've been making just the minimum payments thus far, and will clear the remaining £1000 balance in one lump sum in MArch, freeing up those cards.
Finally I have a Barclaycard which has never been used since I received it in May 2007. I intended to use it for Paypal after problems with another card which they blocked, but never got round to it.

The question is, should I cancel the balance transfer cards after they're cleared, or should I just not use them but keep them for later (total credit limits on the two cards is about £1400). There's also £720 limit on the barclaycard.

Thanks for any tips.

H.

jinkssick

Well thinking of the fact that by the time you go back to the cards either balance transfers or purchases special offers are over.

So the best youd hope for is a reduction in APR%, you might aswell close and open some in the future with good outstanding offers.

patwa_2

Hi,

I see your point, but I was really asking with regard to having credit available to use. It would be of no benefit to close the cards only to be declined when I needed to open one again, because lending criteria have been tightened up. That having been said, it goes back to how beneficial it would be in terms of credit ratings just to have the cards open and active on my file even if not used.

Thanks.

H.