A question of money: Old credit cards
Published 10/05/2010 | 11:13
Question: I have moved credit card balances around to make use of the interest-free periods for balance transfers. I have then kept the accounts open of the old cards with nil balances. Is this sensible, or could it damage my credit rating?
Answer: Having several credit card accounts can lead to lenders worrying about your potential ability to run up large debts, so it is sensible to close credit card accounts when you no longer intend to actively use the cards.
This is especially true if you are considering applyingfor a large loan, such as a mortgage.
It is important to formally notify the credit card issuer that you are closing the account, rather than simply cut-up the card.
Another risk of having credit and debit cards that you no longer use is that you may forget to notify the issuer when you move.
Failing to do that opens you up to the risk of fraud if a replacement card is delivered to your old address.