Farewell, Credit Cards – All You Need to Know About Closing Your Credit Cards

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Farewell, Credit Cards All You Need to Know
About Closing Your Credit Cards
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• When the term plastic fantastic came about in
  the 80s, few could have imagined just how reliant
  we would become on credit cards.
• Today, there are 32.3 million credit card holders
  in the UK. These individuals owe a total of 70.8
  billion, which equates to a 2,604 credit card
  debt for every single household.

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• Whilst convenient, you may be wondering whether
  you should close your credit cards. In this blog,
  were going to answer all your credit card
  closure questions from should I keep my oldest
  credit card account? and how do you cancel a
  credit card?.

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• Should I close my credit cards?
• If you continually rack up credit card debt that
  you dont keep up on repayments in this
  instance it may make sense to shift the debts to
  a personal loan, which generally has a far lower
  interest rate than a credit card. A personal loan
  would also remove the temptation to repay an
  amount, only to use the credit card again.
• Where youre paying an annual fee and you dont
  make use of the premium services it covers (such
  as insurance and roadside breakdown cover).
• When you need to have simpler finances (for
  example, if you have multiple credit cards open
  with different balances, it may make sense to
  only have a single card with the best interest
  rate).

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• If youre paying hand over fist on interest rate
  fees you should consider moving your balances to
  a single credit card under a 0 balance transfer
  deal. These offers provide you with a period of
  being interest free over which time all your
  repayments will go towards reducing the debt.

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• Should I keep my oldest credit card account?
• You may have heard that closing your oldest
  credit card can hurt your credit rating. But its
  simply not true to say that you should never
  close this account. While its a fact that a
  long-standing credit account, which has been kept
  up-to-date with repayments, can help your credit
  rating, it will remain on your credit history
  even if you close it.

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• Should I cancel my unused credit card?
• If you dont use your credit card, and know that
  you wont use it in the near future, you should
  consider cancelling it for the following reasons
• It reduces the risk of fraud
• It improves the image that lenders have of you
  especially if youve moved from having many
  credit cards with a very high total credit limit

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• However, you should also be aware that showing
  that you can responsibly manage multiple credit
  accounts is key to maintaining a good credit
  score. If you dont have many other credit
  products (such as a loan, overdraft and
  mortgage), it may be advisable to keep your
  credit card open.

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• Another factor to consider is that a zero balance
  on a credit card that is then closed, means that
  your overall credit utilization will go up.
• For example, if you have two credit cards, one
  with a 500 balance and a 500 limit, and another
  with a zero balance and a 500 limit, closing the
  latter will result in your overall credit
  utilization shooting up from 50 to 100. This
  would mean that you are maxed out. As a general
  rule of thumb, you should aim to use less than
  30 of all available credit.

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• How do you cancel a credit card?
• If youve decided that closing a credit card is
  the right move, then you can cancel the credit
  card by contacting the lender.
• If you have a balance on your credit card, youre
  still allowed to cut the card up while repaying
  the balance (this can help if you cant control
  yourself from making impulse purchases).

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• If youre concerned that your debt problems are
  spiralling out of control, and are unsure as to
  the best move to make, you should speak with an
  impartial debt agency, wholl be able to provide
  you with tailored advice based on your
  circumstances.

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Thank You

• National Debt Help
• Beckwith House,
• 1 Wellington Road North,
• Stockport, SK4 1AF
• https//www.national-debt-help.co.uk