Closing credit accounts.

[Nickyboy]

Having just paid off 2 credit cards and will have paid off a 3rd by Christmas i'm now pondering the best course of action.

I've got a total of 7 credit cards and 1 store card, total combined limit of around £47k

We're looking at moving later next year so will be talking to my adviser in the spring, what i'm trying to work out is what accounts to close. The store card is one as well as 2 of the credit cards that have a low limit. Would it be worth keeping one with a high limit but zero balance or just closing and get rid of all of them?

[Jefferson Steelflex]

You should keep at least one, I was told that credit utilisation (I.e. how much of your available credit you use) is one factor in lending decisions. I’d imagine there’s a happy medium between how many accounts you have and how you manage the balances. There’s no doubt that having too many is bad, so I’d definitely get rid of the store card and the higher interest cards.

Someone far more qualified will no doubt be along shortly, but as I had a similar conversation with a mortgage broker about 18 months ago I thought I could chime in.

[Edible Roadkill]

Just have what you need?

I've got a barclaycard cashback for everyday purchases and a Halifax clarity for overseas non sterling transactions.

Both are always cleared monthly in full.
Combined credit limits around 19k.

Credit utilisations always tiny.

My credit score on Experian is 999 so must be doing something right.

[NoVetec]

Jefferson Steelflex said:

You should keep at least one, I was told that credit utilisation (I.e. how much of your available credit you use) is one factor in lending decisions. I’d imagine there’s a happy medium between how many accounts you have and how you manage the balances. There’s no doubt that having too many is bad, so I’d definitely get rid of the store card and the higher interest cards.

Someone far more qualified will no doubt be along shortly, but as I had a similar conversation with a mortgage broker about 18 months ago I thought I could chime in.

I've heard this too for credit cards and overdrafts. I kept and then 'upgraded' one credit card and my overdraft after clearing debts I built up stupidly when I was younger.

Experian score in the low 800s which includes a default with Orange still on there.

[Nickyboy]

Thanks

My experian score is currently 965 even with all that, i planned to keep one with a high limit but a zero balance so that when we eventually move we would use it for renovations etc

[Simpo Two]

Edible Roadkill said:

I've got a barclaycard cashback for everyday purchases

That caught my eye, as my credit card provider no longer pays cashback. But Barclaycard's conditions say:

'When we pay you your cashback, we will credit it directly to your account balance. It will be classed as a credit and not a payment, so although it will reduce your balance it will not count towards the amount you have to pay.'

Surely if you get, say, £50 cashback credited to your account that's £50 less to pay off?

[deckster]

Simpo Two said:

That caught my eye, as my credit card provider no longer pays cashback. But Barclaycard's conditions say:

'When we pay you your cashback, we will credit it directly to your account balance. It will be classed as a credit and not a payment, so although it will reduce your balance it will not count towards the amount you have to pay.'

Surely if you get, say, £50 cashback credited to your account that's £50 less to pay off?

What they mean is that although it will indeed reduce your outstanding balance, it doesn't count towards your monthly payment. Let's say you have £1k balance, and you need to make a minimum payment of £50 this month. If they credit you with £50 cashback, it reduces your balance to £950 but you will still need to make your minimum payment of £50 to avoid additional charges.