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RelievedSheff · 12 November 2019 at 2:36PM

I have just been accepted for a Halifax credit card with 25 months 0% on balance transfers.

I am taking the balances from my Aqua and Vanquis cards across to this card. The totals of the two cards and transfer fees will come to about £8k. The limit I have been accepted for with the Halifax card is £9k.

My question is should I now cancel the other two cards?

The Vanquis card has a limit of £3500 and the Aqua a limit of £5500.

eskbanker · 12 November 2019 at 3:31PM

There's no right or wrong answer to this really, but there are two schools of thought:

Keep them - the higher your total available credit, the better your utilisation ratio (used v available) is.

Ditch them - the lower your total available credit, the better your affordability ratio (available v income) is.

On balance, the former is often better, but it's a generalisation without a greater understanding of your full financial circumstances....

[Deleted User] · 12 November 2019 at 3:55PM

Keep them as backups

Ben8282 · 12 November 2019 at 5:08PM

Do you have any other credit cards?

RelievedSheff · 12 November 2019 at 5:20PM

No. Just those three.

Ben8282 · 12 November 2019 at 5:33PM

So if you close them you will be leaving yourself with only one credit card and less than £1000 available to spend. Your utilisation will be around 89%. Your total available credit will be a low £9000. I assume you have the 25 month balance transfer card which also has a 12 month 0% offer on purchases but after the 12 months you would not have any card to use for purchases without paying interest.

If you don't close them your utilisation will be around 45% (still relatively high) Your total available credit will be a more respectable but still relatively low £18,000 . You will have two cards to use for your day to day spending which you can repay each month and not pay interest.

What do you think you should do?

PRAISETHESUN · 12 November 2019 at 5:46PM

My general advice is to keep them open, provided you are disciplined enough to not use them to run yourself into debt. Generally higher credit limits are seen as a positive, particularly if you keep your overall utilisation low.

RelievedSheff · 13 November 2019 at 11:17AM

Ben8282 wrote: »

So if you close them you will be leaving yourself with only one credit card and less than £1000 available to spend. Your utilisation will be around 89%. Your total available credit will be a low £9000. I assume you have the 25 month balance transfer card which also has a 12 month 0% offer on purchases but after the 12 months you would not have any card to use for purchases without paying interest.

If you don't close them your utilisation will be around 45% (still relatively high) Your total available credit will be a more respectable but still relatively low £18,000 . You will have two cards to use for your day to day spending which you can repay each month and not pay interest.

What do you think you should do?

We don't tend to spend on the credit cards day to day. That is taken care of via our current account.

We had an unintended house move early this year which has hit the credit card balances heavily. We are glad we did move but equally we will be glad when the credit card balances have gone back to zero.

Switching the balances to one 0% card will enable us to be still paying the same amount of the balance each month but saving £165 in interest payments!

Vanquis have this morning raised the credit limit on that card from £3.5k to £4k which I suspect is linked to Halifax requesting the balance transfer.

[Deleted User] · 13 November 2019 at 11:52AM

RelievedSheff wrote: »

Vanquis have this morning raised the credit limit on that card from £3.5k to £4k which I suspect is linked to Halifax requesting the balance transfer.

The two aren't linked.

Vanquis run the selections for limit increases a long way in advance, with last minute checks for exclusions only.

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