Better to have no credit cards, or a few with £0 balance?
Discussion
Hello
I'm in a fortunate position at the moment to have three credit cards with £0 balance. Collectively I probably have around £30k of available credit over the cards.
I've always wondered whether this affected my credit score or not? Does it look good to have all that credit available and not use it, or is it better to show that you frequently use credit but always meet payments each month on them? I'd probably always keep just one card for emergencies, but if having three is adversely affecting me then I'll get rid of two of them.
Many thanks
I'm in a fortunate position at the moment to have three credit cards with £0 balance. Collectively I probably have around £30k of available credit over the cards.
I've always wondered whether this affected my credit score or not? Does it look good to have all that credit available and not use it, or is it better to show that you frequently use credit but always meet payments each month on them? I'd probably always keep just one card for emergencies, but if having three is adversely affecting me then I'll get rid of two of them.
Many thanks
Good information on this can be found here.
article said:
Improved Credit Score. When you cancel your cards, by definition you have less available credit. This is a boost to your credit score as it means potential over-indebtedness is less of a problem. For this reason alone cancelling your credit cards is worthwhile
Choices would appear to be - keep the one which has been issued by the bank where your current account lives (assuming you have one from your own bank), keep the one with the smallest limit or simply get rid of them all.Edited by Duncanthemad on Monday 12th April 15:04
V8mate said:
Buy everything on your credit cards during the month and pay them all off when you get paid.
A lot of CC companies are running use 'em or lose 'em policies at the moment.
Thanks: didn't know about the 'use or lose' ... I've a couple of cards with zero o/s on them in the UK still.A lot of CC companies are running use 'em or lose 'em policies at the moment.
V8mate said:
Buy everything on your credit cards during the month and pay them all off when you get paid.
A lot of CC companies are running use 'em or lose 'em policies at the moment.
I have just lost my Egg card for not using it. I suppose it is a sensible move for the provider not to have th risk of unused cards flating about although they dressed it up as 'responsible lending' in the closure letter they sent me.A lot of CC companies are running use 'em or lose 'em policies at the moment.
On the original post, I don't know. I assume having other long term cedit facilities to show you can spend and rep[ay helps better than no history but others wioll know better.
Interesting on the use it or lose it policy. The missus and I both have store credit cards with on particular shop. We both shop there fairly often. She spends on hers and pays the debt off over a few months. Mine I tend to use and pay off immediately (talking within hours of a purchase) and after the 1st few months of this they increased her limit and reduced mine.
Miguel Alvarez said:
Interesting on the use it or lose it policy. The missus and I both have store credit cards with on particular shop. We both shop there fairly often. She spends on hers and pays the debt off over a few months. Mine I tend to use and pay off immediately (talking within hours of a purchase) and after the 1st few months of this they increased her limit and reduced mine.
Not really a suprise, your missus is exactly the kind of customer they want, the interest rate on most store credit cards is circa 30%, so they make a lot of money in interest from her paying back slowly. They make no interest from you in fact it costs them money to administer your account.
V8mate said:
jmorgan said:
Binned ours years ago and a recent application for re mortgage and the lender reckoned she had never seen such a good score.
That's what she said when, to her relief, you limped over the qualifying line!Ah, I see what you did there.........
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