What to do with old cards?

robert_h_2

iceking wrote:

Quick question.

Does halving the available credit on your credit card substantially improve your credit rating?

i'd like to have opinions on this too, please?
does reducing a credit card available limit of, say, £3000 down to £1000 make a difference to your credit rating?
thanks, robert

grumbler

robert_h wrote:

i'd like to have opinions on this too, please?
does reducing a credit card available limit of, say, £3000 down to £1000 make a difference to your credit rating?
thanks, robert

You can find a few opinions in this thread: Should I cancel my credit cards to up my credit rating ??

robert_h_2

The answer is 'yes' if total credit available is close to your annual income. Otherwise, *I think*, high limit with some provider can help to get comparable limit with a new provider.

so, in my case, "no" is the answer. thanks.

asharon

tithyrin wrote:

If I am in credit with a CC (£5 tops) and I want to cancel, will they send me a cheque for the credit or will I not be allowed to close the account?

If you phone them and ask they should either transfer it to your current account or send a cheque.

al_yrpal

I keep a few expired cards which I keep in a wallet, along with a couple of small notes (usually 5 dollar bills if I am abroad). If I get mugged this is what gets handed over to the mugger.

My real wallet has a loop velcroed into it which is looped around my belt with the wallet tucked into the the top of my trousers at the front, out of sight.

I am glad to say I haven't been mugged yet.

ktpazur

MSE_Andrea wrote:

To ask a question or discuss the 'What to do with Old Cards?' Article just reply to this.

I recently set out to cancel all my old and disused cards with a view to security/identity theft issues. I dug up over 20 (!) of which I now only use 2. Ringing round all the providers however produced several who just happened to have current special offers to welcome me back if Iwanted to keep my card - some quite good e.g. 0% offers which I would not have heard of otherwise! As I have just been through the wringer trying to get a modest car loan with a rate of 8.5% I have now taken out the money on my Egg card anniversary offer at 0% with no fee and shall follow Martin's advice to keep it at 0%!!

KP104

I have a store card that I applied for and used only once, to make the most of a special offer. I've had it since November last year and paid it off immediately so it's had a zero balance since then. Does it look better on my credit scores if I keep it, with it's zero balance, or get rid of it?

James_Dodd

A warning about cancelling cards. As a new member I didn't have the advantage of reading the warnings on this site ,also didn't read the small print that came with tha card. Some years ago I applied for and got an Accucard card, did a 0% balance transfer, I paid off the amount over 2 years ago and cut up the card, since then heard nothing until this A.M. when I got a letter asking for 2 years ,card fee, on phoning to ask what it was for I was informed that I had to pay it or my credit rating would be affected. motto Be careful to cancel

duggles

ktpazur wrote:

I recently set out to cancel all my old and disused cards with a view to security/identity theft issues. I dug up over 20 (!) of which I now only use 2. Ringing round all the providers however produced several who just happened to have current special offers to welcome me back if Iwanted to keep my card - some quite good e.g. 0% offers which I would not have heard of otherwise! As I have just been through the wringer trying to get a modest car loan with a rate of 8.5% I have now taken out the money on my Egg card anniversary offer at 0% with no fee and shall follow Martin's advice to keep it at 0%!!

I had not closed my eggcard account so i could take advantage of the anniversary offer. From the 1st May, the fee for a balance transfer will be increased to 2.5% with no cap or ceiling.

The_Boss

Copying and pasting this from another thread I started a while back...



I'd like to put the opposite view that cancelling cards/reducing credit can be BAD for your credit score.

This time last year, these are the cards I had and when they were opened

Morgan Stanley - £5500 limit (opened may 2001)
bmi MBNA - £6000 limit (opened september 2003)
Virgin MBNA - £300 limit (opened February 2002)
Capital One - £8000 limit (opened July 2004)
NatWest - £3400 limit (opened November 1997)
Lloyds TSB - £3500 limit (opened January 2005)
Egg - £1400 limit (opened september 2001)
Barclaycard - £1700 limit (opened december 04)
Creation finance (Burtons) card - £200 limit (opened June 1999).

Total available credit March 2005 = £30000


I wanted to apply for a mortgage, so decided to have a card clearout. This was the cull. For the record, my application for mortgage was rejected.

Virgin MBNA - closed July 05
Egg - closed July 05
Capital One - reduced limit to £1k in July 05 and then closed October 05
Creation finance - closed november 05
Barclaycard - closed July 05
Lloyds TSB - closed January 06

Reduction in credit limit - Morgan Stanley to £2000 in September 05 and bmi MBNA to £2000 in September 05

Also opened a Halifax 1 card in July 05 with a £1700 limit.

Total available credit March 2006 - £9100
Total difference in credit = £-20900.
The above closures are all reported on my credit reports.

I have never missed a payment on anything and my credit forms reflect this. Yet I have been rejected for an Egg money card yesterday, HSBC card in January and Sainsburys Bank loan in december. I never had a previous rejection when I had high credit limits.


So what is to blame? Well, personally I think reducing credit on a card is a bad idea. I'd go straight to cancelling it - as it probably looks better that you have had a good long repayment history with a high credit limit. I'm sure lenders look at my report and see that I have had bmi MBNA and Morgan Stanley cards for many years, yet only have low credit limits, therefore something must be wrong - as why would they not be granting me increases in limit? Also same with Capital One - it looked like I was given a low limit rather than a high one which then was cancelled.

Searches are not an issue - last 6 months I only have 4 spaced out applications recorded.


So there you go, just an opposite view.