Cleared Credit Card Balance - Close or Leave?

PJC

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Aug 5, 2020
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Morning,

Through a few months of online work, I've managed to clear the balance of one of my 3 credit cards. There's no fear of it being used again, however I'm not sure if it's better for my credit rating to keep an unused credit line or get it off the books altogether.

I know credit utilisation is a big thing at the moment, so just wondering if people have been in the same boat. I looked to actual credit companies like Experian for advice, but their page might as well just be the shruggy shoulders emoji.
 

An-na

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Apr 3, 2018
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Morning,

Through a few months of online work, I've managed to clear the balance of one of my 3 credit cards. There's no fear of it being used again, however I'm not sure if it's better for my credit rating to keep an unused credit line or get it off the books altogether.

I know credit utilisation is a big thing at the moment, so just wondering if people have been in the same boat. I looked to actual credit companies like Experian for advice, but their page might as well just be the shruggy shoulders emoji.

Hi @PJC

Congratulations on clearing a credit card balance. It is best to keep the card and not close it as it will affect your credit utilisation and lower your credit score. If you do really want to close the card be prepared for your credit score to drop and stay lower for quite some time.
I should eventually get higher again but that will take time.

Here is an Experian link that explains what happens simply.

I am doing the opposite to you. I have two credit cards, the second one I only got last month, and I want to get four in total so I am pacing myself over the next year and applying for a card every 6 months or so. There is no particular reason for me to do this other than keeping my credit score high and having lots of credit available which I won't touch but looks good.

I'm sure you know this too but get building and emergency fund in good old fashioned cash as soon as you can in case of emergencies, for example, a pandemic ;)
 
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sam1

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Mar 27, 2021
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I hadn't realised that was the case. I was planning on closing a few credit card accounts as they are just not being used or needed. Thanks for the info! - will need to rethink.
 

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