Credit card question
Credit card question
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Discussion

okgo

Original Poster:

40,679 posts

215 months

Tuesday 13th September 2011
quotequote all
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...

sinizter

3,348 posts

203 months

Tuesday 13th September 2011
quotequote all
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.

Pints

18,448 posts

211 months

Tuesday 13th September 2011
quotequote all
I think the OP's asking from the view of one's credit rating. Good question.
I've got plenty of unused cards, but don't know if I should be cancelling a few to improve my credit rating.

Hyper10

432 posts

186 months

Tuesday 13th September 2011
quotequote all
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

sinizter

3,348 posts

203 months

Tuesday 13th September 2011
quotequote all
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.

Elroy Blue

8,775 posts

209 months

Tuesday 13th September 2011
quotequote all
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.

surfymark

895 posts

248 months

Wednesday 14th September 2011
quotequote all
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