Credit cards

Soozehound · Jul 7, 2020

I've been very lucky recently to have come into some money that has enabled me to get rid of all of my longstanding debt.

Super happy, and now I have 4 credit cards with 0 balance and PayPal credit etc all 0... My next step is working on the credit score tbh, so please any tips would be great, but first, do I keep the 0 balance credit cards, or close the accounts?
Discussions online seem conflicted on the subject!

EdibleDormouse · Jul 7, 2020

I think the advice from places like Money Advice Service has always been use credit sensibly to keep a good credit rating, i.e. use it and pay it off, and keep it below 75% of the total credit limit. I'd personally ditch two of the cards, but that's personal preference, not advice!

homie · Jul 7, 2020

I was thinking the exact same thing. Close 2 and keep 2. Use them to make the occasional purchase and set up a direct debit from your main bank account to pay them off in full each month so you don't get charged any interest. (check the terms to make sure this would be the case, ditch any cards that don't offer it) That will help to build up your credit rating.

MIch21 · Jul 7, 2020

I agree with advice above - make sure you keep the ones if you can that offer some good rewards - like points etc - Tesco/sainsburys - Possibly marks and Spencer? As that way not only do you get good credit rating you can also get points towards other stuff.

PhilE · Jul 12, 2020

I think that using cards and paying them off regularly is slightly better than doing nothing as it shows a good track record of not missing payments.

Also useful to use credit cards for big purchases for protection. For instance a while back I purchased a new TV. Paid the full amount of the TV off the credit card the same day from the money in my current account, just to ensure I had the extra protection of paying via credit card rather than debit card.

Karonher · Jul 12, 2020

Keep 2. I have one that I use and pay off each month and one that is there if I lost the first one.

homie · Jul 12, 2020

PhilE said:
Also useful to use credit cards for big purchases for protection. For instance a while back I purchased a new TV. Paid the full amount of the TV off the credit card the same day from the money in my current account, just to ensure I had the extra protection of paying via credit card rather than debit card.

I had forgotten about that. It's a very good point, especially when ordering online.

An-na · Jul 13, 2020

Soozehound said:
I've been very lucky recently to have come into some money that has enabled me to get rid of all of my longstanding debt.

Super happy, and now I have 4 credit cards with 0 balance and PayPal credit etc all 0... My next step is working on the credit score tbh, so please any tips would be great, but first, do I keep the 0 balance credit cards, or close the accounts?
Discussions online seem conflicted on the subject!

Hi @Soozehound , great that you have been able to clear your debts. It's a fantastic feeling to be free of all that financial stuff.

I am not an expert but it is worth having a look at Martin Lewis site and perhaps joining his Credit Club as its free. I have been on this for a while and it gives you access to lots of financial information including your Experian credit score. If it changes you will be notified.

In regard to closing credit cards it may not be such a good idea as it can affect your credit score negatively. Have a look at the Experian link:

Should I Cancel My Credit Card? Will Doing So Hurt My Credit? - Experian

Canceling a credit card account can affect your credit scores, even if you are no longer using it.

www.experian.com

If I had four clear credit cards I would use two and hide the other two and forget about them.

Good luck with what ever decision you make.

An-na

simpy3 · May 18, 2021

I got my first credit card when I was about 19/20, with Aqua. For a company that's supposed to be a responsible lender, they were sure easy with lending limits! At the start, my limit was about £200, and after about a month that leapt to £500, and then jumped again within a couple of months to £2000!

Bloody mad to give that to someone who's a teenager or barely more.

TJ608 · May 19, 2021

Lol did exactly something very similar to OP. Credit was poor but able obtain two and have 0 outstanding balances. It's easier said than done but it takes self control and discipline to be on top of spending and not abusing it. Cheers for the advice on here..

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Should I Cancel My Credit Card? Will Doing So Hurt My Credit? - Experian

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