Credit card question
Discussion
Hi all,
Just a quick one for those in the know...
I am always hearing conflicting opinion regarding whether its good to have credit cards sitting around unused or having the ones with massive limits with nothing on dormant etc?
I had 5 cards last year, I've whittled that down to 2, one of them has notihng on it, and has a limit of £2500, the other has a similar limit and is due to be paid off in full next month.
When that has gone, what is the best thing to do with them? I've been trying to get totally debt free over the last 18 months and by May I will be as a loan finishes then, so should I keep the cards? Reduce the limits? Cancel them? Cancel one?
Seems to be a bit of a minefield out there with regards to what is good for your rating etc...
Just a quick one for those in the know...
I am always hearing conflicting opinion regarding whether its good to have credit cards sitting around unused or having the ones with massive limits with nothing on dormant etc?
I had 5 cards last year, I've whittled that down to 2, one of them has notihng on it, and has a limit of £2500, the other has a similar limit and is due to be paid off in full next month.
When that has gone, what is the best thing to do with them? I've been trying to get totally debt free over the last 18 months and by May I will be as a loan finishes then, so should I keep the cards? Reduce the limits? Cancel them? Cancel one?
Seems to be a bit of a minefield out there with regards to what is good for your rating etc...
If you can be disciplined enough, get a cashback credit card and put all your expenses through it - Can get upto 1.5% cashback depending on your spend and the card.
I would always keep a minimum of 2 credit cards, with half-decent limits on them at all times - I like having the funds available for use, in an emergency or while travelling (what if one gets nicked or cancelled).
IMO of course, and I'm not an IFA.
I would always keep a minimum of 2 credit cards, with half-decent limits on them at all times - I like having the funds available for use, in an emergency or while travelling (what if one gets nicked or cancelled).
IMO of course, and I'm not an IFA.
I know from personal experience too many credit cards with large limits even if the balance is zero is treated as a negative. The reason I'm lead to believe is that although zero now, it still means you could use all that fire power just as another lender gave you a big loan.
I closed 3 credit cards which had nothing owing and my Experian rating went up. strangely the cards are still shown as accounts but obviously inactive.
BTW this is only my own experience and what I was told so could stand corrected
I closed 3 credit cards which had nothing owing and my Experian rating went up. strangely the cards are still shown as accounts but obviously inactive.
BTW this is only my own experience and what I was told so could stand corrected
No direct answer, as no company rates it in the same way.
It is a balance of credit available versus earnings.
And credit used versus credit available to use.
As long as you maintain all the credit available to you in good order, i.e. make monthly payments as required and don't keep too much of the credit available to you used, you will be fine.
I personally think, it might be better to have 2 cards with higher limits, than 4-6 cards with lower limits.
You can ask a card provider to increase your limit every 6 months, and they are likely to allow you to if you have been keeping up with the payments, etc.
It is a balance of credit available versus earnings.
And credit used versus credit available to use.
As long as you maintain all the credit available to you in good order, i.e. make monthly payments as required and don't keep too much of the credit available to you used, you will be fine.
I personally think, it might be better to have 2 cards with higher limits, than 4-6 cards with lower limits.
You can ask a card provider to increase your limit every 6 months, and they are likely to allow you to if you have been keeping up with the payments, etc.
I've received a threat from the Bank of America for an unpaid bill on a card I never activated or used and was cut up as soon as it arrived (20% discount from Amazon for applying)
They blamed Amazon and Amazon denied all knowledge. From bitter experience, close any card you don't use.
They blamed Amazon and Amazon denied all knowledge. From bitter experience, close any card you don't use.
I was told by a lender that you should have 2 or 3 cards with a good history of spending and paying the bills on time.
However they do take into account how much credit you have available. So if you had 3 cards with £30k limit on each, that would be not so good as 3 cards with £2k limit on each.
That is just one lender though so may not be universal.
HTH
M
However they do take into account how much credit you have available. So if you had 3 cards with £30k limit on each, that would be not so good as 3 cards with £2k limit on each.
That is just one lender though so may not be universal.
HTH
M
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