Cancelling old credit cards

You know how it is, you sign up to every deal going just to get a discount – before you know it, you’re drowning in vouchers and offers for things you don’t really care about. It’s a bit like that with credit cards – it’s like they’ve bred in your wallet and you suddenly have more than you know what to do with. A bit of housekeeping’s great, but what (if any) are the consequences of cancelling your old credit cards?

Is having more than one credit card a good thing?

There’s no question about it – if used sensibly, credit cards are great. You can spread the cost of all your lovely new things and if you do it right, you won’t have to pay any interest - something that can even help for that all important budgeting. You can also be rewarded with cashback or reward points – giving you the necessary excuse to buy even more stuff you don’t need.

But having more than one card isn’t just for spendthrifts;, spreading your credit evenly, never reaching your maximum on one, and always being on time with payments (or early), shows you’re a canny money manager. As a result, your credit history’s probably A* meaning you might have a better chance of being accepted when it comes to securing more credit, loans or a mortgage.

Having more than one card also gives you another avenue for accessing funds in an emergency. Ideal if your boiler goes or you need emergency home or car repairs and don’t have the cash to hand.

…And the drawbacks of having lots of credit cards?

There’s no limit to how many credit cards you can have. But in the most basic sense, having lots of cards means you need to juggle all those monthly statements and it’s all too easy to get into a muddle. Remember – missing just one payment means you’ll attract interest and it’ll show up on your credit report – not good.

If you have inactive credit cards, it’s also opening you up to potential fraud and anyone less honest than yourself could have a field day at your expense. In addition, you might look like a bad risk to credit card companies if you have access to a lot of credit (more on this later).

Another drawback which isn’t instantly obvious, is that by having lots of cards, you’re limiting yourself to all the new offers that credit card providers like to tempt customers with. It just means you could be missing out on the next big deal so it’s always a good idea to cancel old cards if you’re not using them.

Cancelling old credit cards

Cancelling credit cards and your credit score

The impact of cancelling some of your credit cards is hard to pinpoint and there’s no rule to say having ‘x’ number of cards is better than having ‘y’. Credit card providers each have their own ideas about the sort of customer they’re after so it’s really about being sensible with what you’ve got.

If you have a credit limit of £35,000 across several cards but you’ve only used say £2,000 of all that credit, then the risk is that you’ll spend the remaining £33,000 in a fit of madness one morning. It’s far-fetched but providers want to protect their investment so they have to consider all the options as crazy as they may sound.

Of course other lenders might see that you’ve only used a fraction of your available credit and therefore you’re a pretty safe bet when it comes to sensible spending. As a general rule you should only use about 25%- 30% of the credit you have. If you’re constantly maxed out it looks like you’re always in need of more money which doesn’t make you an attractive prospect.

How to cancel a credit card

If you’ve decided that cancelling a credit card or two or three is the right way to go then it’s not as simple as just reaching for the scissors. Cutting through that magnetic strip and feeling the scissors crunch over all the numbers just stops you from using the card – it doesn’t actually mean it’s been cancelled.

You need to contact the credit card provider and ask to cancel the card, you should also request confirmation in writing (don’t assume that it’ll happen automatically). When you receive your final statement double check that everything’s up to date and there are no outstanding payments still to go through. It’s always worth following up a month down the line just to make absolutely sure it’s been shut down.

how to cancel a credit card

What credit card should I get?

That’s down to what you need. If you’ve got an existing debt that needs paying off it’s probably worth looking at balance transfer cards, you might find one with better repayment terms than your existing one. Or if you use your card for day to day expenses consider using one that offers you rewards such as cashback or vouchers.

And credit’s not just for those with gold star credit reports so if yours is less than angelic look at how to build your credit score and consider a credit card for bad credit Whatever you need, you can find it right here at, let’s go…

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