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Morning chaps,
I have three credit cards. I don’t use two of them, and don’t need them. I think I just got a new card with better APR and stopped using the last one.
So my question is - would it be best from a credit rating perspective, to cancel these cards, or just throw them in a draw or cut them up?
Cheers
Suspect if you aren't using them, then yes, cut them up and cancel them. I believe if you don't use the credit card then it doesn't improve your credit rating, so no real point having more than 1 if you are only needing/using 1.
Thank you.
Just wondering from a lender’s perspective it might say ‘this guy has access to x amount of credit but only uses 5% say, or ‘this guy’s got too many cards, he’s a liability’…
Your credit rating is about how you manage debt. So if you don't use those other two cards then it's not helping - but it isn't harming either.
Personally, if it was me, I'd just cancel them and have just one card to keep things simple.
I've got two that don't get used. The plan if I need a big purchase, is to buy on one then transfer to the other that has the lowest "balance transfer" deal
I don't think it matters. Cards you don't use and cards you don't have are equivalent. What matters is using the credit you have and not missing repayments. My mum's never owed a penny to anyone in her life, her credit rating is terrible.
(Also, for the love of pete, it's a ****ing drawer. Argh.)
No credit use is worse than abusing it! Seems mad but that's the way they manage risk, high risk is better than unknown.
So my question is – would it be best from a credit rating perspective, to cancel these cards, or just throw them in a draw or cut them up?
Standard advice is to never go above 1/3rd of your credit limit on a card for more than a month and regularly pay the balance off, this shows you have good debt management. Maxing out is not good either but the occasional big purchase with a few hundred spare (to allow for interest) is fine as long as it's paid off quickly. Having two unused cards will hurt your application for more though as they will see that you have access to credit in addition to what you're applying for. Credit rating should be unaffected but they're only a guide anyway, lenders use much more precise analysis to decide to approve you or not. For example you could have two cards with no balance but £10k available between them. You apply for a £6k loan which is comfortably affordable but the lender sees that you could, in theory, get the £6k loan but then immediately run up another £10k on the cards, pushing you above their risk limit. So even though your credit history may be very good the risk is not favourable. If you have a good credit rating and are generally sensible then getting more credit if you need to shouldn't be hard so I'd definitely get rid of the unused cards and use the remaining one sensibly.
Cancel them. You have a maximum amount of unsecured debt you can borrow. Regardless of whether they’re in use or not, they’re still counted against that maximum.
I keep two cards, one for everyday UK use and one for all overseas transactions that has no fees.
Standard advice is to never go above 1/3rd of your credit limit on a card for more than a month and regularly pay the balance off, this shows you have good debt management.
This, I went to about 40% on my card in the run up to Christmas (always paid off in full each month) and it cost me a few points on my rating. I'd say having cards and not using them won't affect you either way. Might be better to keep one just in case and cut up the other.
It won’t affect your credit rating, but your credit score isn’t the only thing which decides what you can borrow.
I had a perfect credit score with 2 of the 3 agencies (I didn’t check the third) but wanted to take out a low interest loan for home improvements before the rates went up. The results returned via comparison sites were very poor, so I spoke to Experian. The recommended closing all of my cards not currently in use (£75k of available credit), keeping one, but at a lower credit balance. I did this and within a month the loan offers were MUCH better. Down from 5.5% interest to 1.8%.
(Also, for the love of pete, it’s a ****ing drawer. Argh.)
I'm blaming tiny iPhone screen for that. Not usually one to make such a heinous mistake.
Thanks everyone. I plan to cancel them both, then maybe apply for a better one and have two on the go, just in case.
I've got four.
One for day to day use, which I use 'normally' and three I'm stoozing and making a few quid on.
I was turned down for another new one, wanted to do more stoozing, but two of my current ones keep upping the limits🤷♂️
I have no idea how that works