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Should I cancel my old credit card?

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Many of you may have that trusty old credit card tucked away in the back of your purse or wallet; you rarely use it, but can’t bring yourself to cancel. Perhaps you like the security of having an emergency card or maybe you have forgotten and presumed because you don’t use it, it’s not really active?

It really depends on you

Depending on how you use your card, you may be better off cancelling. Cancelling any old cards can boost your credit rating as it means you have less access to credit and therefore less ability to build up large debt, making you a more attractive customer. Lenders are always trying to temp new customers and often reserve the best deals to new clients only. By cancelling any old cards and waiting a while, you can become a new customer once more and reap the benefits on offer. Each lender will have its own guidelines on how long you have to wait before applying again but it can range from as little as a month with Halifax, Virgin and Capital One up to a year with Nationwide.

You may be offered further benefits from your lender

If you are planning on cancelling your cards, you must ensure they are fully cancelled with your lender so that your credit rating is reflective of your situation. Just cutting them up won’t count, you may not be spending on them but to other lenders, it will be seen as credit available to you and may impact on your ability to get further credit. You should always check your final balance and then call or write to your lender to cancel the card. This alone may spur them to offer you more tempting deals, which may be of benefit to you if you were looking to cancel for a better offer elsewhere.

Great deals for existing credit card customers

If you don’t use your card often, aren’t looking for the deal of the decade or simply don’t want the hassle of cancelling or switching, there are advantage of keeping your trusty plastic which may be more beneficial to you. Some lenders offer great deals to existing customers to encourage you to use the card more. While they may not be quite as good as new customer deals, they don’t take any effort on your part and no credit check is required. You may not have the best credit rating or be able to get good deals elsewhere, so keeping your existing card will be the best option in the short term.

Extra protection with a credit card

Paying for items on your credit card also offers you extra protection than when you make a purchase with cash or debit card. Purchases over £100 means the card company is equally responsible as the retailer if there is an issue and offer peace of mind for bigger purchases. Check your cards terms and conditions as many have additional perks such as extended warranties on electrical goods which can be more valuable in the long run.

cancel my old credit card?

Keep a credit card for an unexpected rainy day

If you plan on keeping a credit card or two simply for emergency situations, then make sure they are locked away somewhere and not within easy access in your purse or wallet, tempting you to make impulse buys. Ideally we all want a healthy savings account but in reality, a credit card counts as our back up fund for unexpected situations. But remember, if you do have any savings as well as credit card debt, it will be cheaper in the long run to pay off the card than to keep savings as the interest you are paying on the card will undoubtedly be more than that on your savings.

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About Rebecca Robinson

About Rebecca Robinson

After spending the last 8 years juggling life as a mum of two, wife and working full time as a Project Manager for a global telecommunications company, Rebecca Robinson made the decision to follow her love of writing and took the plunge; turning her passion into a full time career. Since becoming a full time writer, Rebecca has worked with various media and copy-writing companies and with the ability to make any topic relevant and interesting to the reader, now contributes to The Working Parent on articles ranging from credit cards to teenage relationships. Ever the optimist, Rebecca's dreams for the future include a house in the country filled with children, dogs and horses in the field!

Website: Rebecca Robinson

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