Credit Card as a loan

Big Chris

Big Chris

Big Chris

Soldato
Joined
5 Apr 2004
Posts
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Location
Bloxham
I already have a credit card which I clear the balance of every month.

I'm planning to get another card with a 15 month 0% purchases period to buy a single item which is quite expensive. I'm going to effectively close the card once I've bought the item then pay the balance off over the 15 months - is this frowned upon by credit card companies or do they not care so long as I pay on time each month as per my other card?
 
When closing a credit card just try to do this.

Pay of credit card so balance is zero. Then have 2 or 3 statements come in at zero. Then cancel the credit card. Do not pay off balance and then cancel straight away.
 
LiE said:
Probably just looks better for your credit score?
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110% correct


Got it :D

If you have an open credit card with a £2,000 credit limit and a £1,000 balance then you are 50% “utilised” on that account because you’re using half of the credit limit.

If you don't use the account for two months, it goes to sleep and when you cancel it, it doesn't flag as a credit limit change. And it doesn't drop you "utilised" part. It may still pop up on you're credit file. BUT if it goes to sleep before you cancel it, it wont affect it.

It is getting round the system.

I did it the WRONG way and i lost 50points of my credit score :(

I paid of my credit in July, and cancelled in July. So they lowered my credit limit, then cancelled the account. Rang equifax and got it taken off my report. Put it this way in 3 months i have managed to really really boost my credit rating. 3 months ago, i was no way getting a loan. Rang last week and they were bending over backwards. Yet i am no better off and not earning more :D

sleep.jpg
 
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I've only ever used credit cards for interest free credit aka Credit Card Tarting. Hopping from one 0% deal to another. I personally found it more flexible than loans and also cheaper for my personal circumstance even when accounting for balance transfer fees. It's common practice as said.
 
smoove said:
I've never heard of that either! I've had a 0% credit card, done my shopping on it and cut it up and wont be using it for the remainder of the 18 month 0% interest deal. Once its all paid, I'll be canceling it, are you saying thats bad?
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It was explained to me over the phone, cancelling a credit card can affect you're credit rating if you clear balance to zero. The cancel it straight away. If you have a couple of credit cards statements at zero, then cancel. It is better.

This here hints at it, if it goes to sleep 9 times out of 10. It will state on you're credit report "closed by customer"

http://www.compareandsave.com/tools...rds/how-to-switch-credit-cards/how-to-cancel/
 
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Equifax don't rate you*, though. Lenders do, and Equifax are not a lender. They provide information to lenders which lenders use themselves, using criteria known only to themselves, to decide whether to offer you credit and how much.

*Those 'get your credit score!' things are meaningless.

Put simply, I do not beleive it makes any difference whether you cancel or leave it empty for a few months, and I don't think somebody working in a call centre at Equifax would be any more likely to know the mechanics than somebody working in a Norwich Union call centre would know about insurance premium calculations..
 
BringTheRain said:
This here hints at it, if it goes to sleep 9 times out of 10. It will state on you're credit report "closed by customer"

http://www.compareandsave.com/tools...rds/how-to-switch-credit-cards/how-to-cancel/
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It hints at no such thing and even tells you to cancel it at step one if you really want to get rid of a card.

I suspect you've got rather confused and think that if you cancel and close immediately it goes down as the lender closing the account or something? It doesn't - it just gets marked as Settled, as with any other method of cancellation initiated by the customer if the account was in good standing.
 
If you cancel as soon as the balance is zero. The chances are it will state on your credit file "closed by creditor"

If you wait two months or so. The account goes to sleep. When you cancel the account, there is a greater chance of "closed at customer's request"

"When you look at your credit report you will need to make sure that by the closed credit card account is a phrase that says something like ‘closed at customer’s request’ and not ‘closed by creditor’. If the latter is written it will reflect negatively on you and affect your credit score.!"
 
[QUOTE='[TW]Fox;19863107'

I suspect you've got rather confused and think that if you cancel and close immediately it goes down as the lender closing the account or something? It doesn't - it just gets marked as Settled, as with any other method of cancellation initiated by the customer if the account was in good standing.[/QUOTE]

So why does my credit report state on one credit card "closed by creditor" and the other credit card state "closed by customer". I cancelled and closed one credit card in the same month. That got changed to "closed by creditor"
 
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