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Cut your Credit
While having a well-maintained credit card is good for your credit rating - it shows that you’re responsible with money and that you can be relied on to repay debts on time - you shouldn’t have a host of old cards lurking around.
Cancelling old, unused credit cards actually improves your credit rating. When you apply for credit for something - not necessarily another credit card - your prospective lender will look at how much credit you already have. It doesn’t matter whether all your cards are empty, you’ll still be less likely to be approved because of them.
In addition to this, if you cancel your card, in time you’ll be eligible for the attractive new offers from that bank, which invariably go to new customers.
Don’t just cut them up
Some people think that by cutting up their card, their account will be cancelled but this isn’t the case. You need to contact your lender and specifically ask for the account to be closed - and then you can cut up your cards.
It is also good practice to ask for the cancellation in writing as occasionally banks don’t process the cancellation, so it’s good to have a record handy.
New deal
When you call up to cancel your card your provider might even offer a tempting deal to keep your custom - but only stay if it really is worth it. If it’s an offer that will only serve to encourage you to spend more, then don’t take it - cancelling your credit card and not spending on it will save you much more money than a low interest rate or a reward scheme.
