Cancel Credit Cards?

[Casdawer]

Hello,

Recently I have paid off both of my credit cards!

These are with 2 different banks, none of which are where my main current is.

I was thinking about cancelling them both and then getting one with Natwest which is where my current account is located as it keeps things simple.

Now, does cancelling credit cards negatively affect my credit score or does it not make much of a difference and second, is it even worth doing all this and should I just leave it as it is?

Thanks for the (possible) helpful advice!

 

[Diddums]

Not negative at all, probably positive.

 

[phonemonkey]

There is no such thing as a 'credit score' but it will probably look better on your file if you close unwanted credit accounts, even paid off and dormant they are technically a source of credit you could use without application which could impact on your ability to pay off any new credit you apply for.

 

[Rids]

Do you have much other credit?

I cancelled one of my unused cards which had a £7k limit, my credit rating was adversely affected because it pushed my credit utilisation way way up.

 

[kayomani]

Having lots of unused credit can have a negative effect

 

[The Geezer]

There is no such thing as a 'credit score'

Really

 

[Rifte]

Having lots of unused credit can have a negative effect

Hmm my experience is the opposite.

The more available credit you have the better. It gets worse when you are using a lot of your available credit.

The only reason I know this is because it comes up as a postive factor on my experian and equifax reports that I only use a very small percentage of the credit available to me.

I have two credit cards that I never use. I have one that I use regularly (but clear montly).

 

[.Lethal]

Hmm my experience is the opposite.

The more available credit you have the better. It gets worse when you are using a lot of your available credit.

The only reason I know this is because it comes up as a postive factor on my experian and equifax reports that I only use a very small percentage of the credit available to me.

I have two credit cards that I never use. I have one that I use regularly (but clear montly).

Credit Cards and Credit Rating isn't a straight forward thing.

By using a credit regularly it can be a good thing as long as you aren't maxing the cards out (maybe as much as 40-50% of the balance) and paying it off. Don't repay the debt until you've had your statement though!

By having a lot of unused credit it can make lenders wary that you might suddenly spend a massive amount of money and not be able to repay it back.

If OPs credit card is very old it's also worth considering keeping as a long history with 1 company is sometimes seen as a good thing, and closing it could impact your rating negatively.

 

[Rifte]

If OPs credit card is very old it's also worth considering keeping as a long history with 1 company is sometimes seen as a good thing, and closing it could impact your rating negatively.

This is VERY true.

 

[helpimcrap]

Close one card, keep another as emergency back up. Keep using it every month or two just to prove payment etc.

I have 4 cards.... and they agreed to increase my limit by 500% on 2 cards which I needed special authorisation for but other than that I never use them except for interest free balance transfers on big purchases.

 

[GinG]

I was always under the impression the more credit available vs actual lack of use is showing you are capable of controlling spend etc etc.

For example I signed up to clearscore the other day after a recommendation on here, and as a positive it says I am only using £x out of a possible £13k on one credit card.

However when you read around I really do not know if there is a right or wrong answer as a positive for one company could be seen as a negative as potentially right now I could blow all my available limit on an 8pack PC system

 

[Bunka]

Not sure how accurate this is but I read a couple of days ago that keeping your spending on a credit card below a 30% threshold of total available credit is seen as a positive thing.

I'm not sure how that works with my Amex gold card as that's a charge card with no limit and technically isn't "credit".

 

[Jamesyboyjim]

I was told years ago that having too much credit available to you can actually go against you. No idea if this is true. I think I read it in an article Martin Lewis wrote.

 

[nick5ter]

Utilisation is important here, if you close both your other cards... I would ensure that your new card has the same total limit of both cards if possible.

Otherwise keep them open, it does nothing if there just sitting there doing nothing... unless your paying for having the credit cards.

 

[Redgie]

Please don't close cards and move everything to 1 bank because it's "simple". The game of personal finances is won by the person whose finances work for them. Get a current account that pays interest and cashback on utilities, get a credit card that gives cashback for everything you put on it (and then put everything you buy on it - but then have it pay off in full every month).

Earn money from your money, instead of simplifying

 

[dowie]

I was thinking about cancelling them both and then getting one with Natwest which is where my current account is located as it keeps things simple.
[...]
Thanks for the (possible) helpful advice!

I don't see what is simplified by doing this?

You should get the best card for your needs IMO not just the card that happens to have the same brand name as your bank out of some notion that that somehow keeps things simple.

 

[MooMoo444]

I don't see what is simplified by doing this?

You should get the best card for your needs IMO not just the card that happens to have the same brand name as your bank out of some notion that that somehow keeps things simple.

Does keep things simple though, since through online banking you have your CC balance and your account balance together. At least that's how my natwest one is right now.

 

[Redgie]

Does keep things simple though, since through online banking you have your CC balance and your account balance together. At least that's how my natwest one is right now.

But if the alternative is that your CC earns you money, is it really such a bother to have 2 apps on your phone instead of 1? To log into 2 online banks instead of 1?

 

[dowie]

Does keep things simple though, since through online banking you have your CC balance and your account balance together. At least that's how my natwest one is right now.

So you save yourself a few seconds by logging into one site instead of two if you happen to want to check your balance between statements?

Seems like rather a trivial benefit...

for amex it is just user/password which can be stored in browser - so I can click on a link when I get a monthly e-mail from them and go check my statement just as easily anyway

 

[The-Plethora]

I remember shifting money from a loan to clear some credit cards and when I went into Halifax they told me it would be better to cancel any unused credit cards for the sake of credit checks.

I have a work one and 2 personal ones that have a bit on, not much thankfully as I hope to be in your situation with them cleared this year but with the 0% deals it's helpful moving that balance back and forth and I don't spend anything on them anyway.

When I get the debt gone I will plan to close one of them.