Credit cards and mortgages - how many is the right amount?

[pastaofplenty]

Just looking for a bit of advice really.

I have three credit cards which I'm paying off quite steadily, however I don't know what to do once they are paid off in full.

Do I cancel the card or would it be better for credit checks that I keep all, some or one? And if so which ones?

In brief I have:

One 0% transfer card (Barclaycard) with a limit of £10.5K which I have had for 18 months and will be clear in September.

One card (Nationwide) linked to my current account (where salary gets paid) with a limit of £3.5K. This is all paid off and I have had it for 24 months.

One card (HSBC) inked to joint account with DH (only I have credit card) - which I have had for over ten years and has a limit of £3.7K. This will be paid off in July.

So which card would you keep?

We will be applying for a mortgage in about 12 months (awaiting sale of property abroad) so want to be in best position to proceed - Experian rating so far is excellent - so don't want to mess this up by cancelling or keeping "wrong" card.

Any advice greatly appreciated.

they do not care - its the repayment record they are interested in

They'll look at how much available credit you have on each (the headroom) so I'd keep them all but make sure you never miss a payment.

So keep them all.

If they are going to be a temptation, I would just keep one card with a fairly low limit. Use it and pay it off every month. Good luck with your mortgage application

Thanks all - will keep them and avoid temptation!

talkin they do care.
Lenders will look at the amount of credit applicants have avaliable to them when working out affordability for borrowing.

In regards to credit cards and the amount of credit avaliable, there is no "magic number", but if I were in your shoes, I'd close the higher limit card once it's paid off.

Thanks for that 19lottie82 - I did wonder whether having so much "available" credit would make me look like a risk.

You hi pasta, yes they will definitely consider that as a factor. Obviously no one apart from the lender can advise how it will potentially affect your individual application but , as I said, if I were in your situation, I'd look at closing down the card with the highest limit.

Lenders look at longevity as a positive. So if you do end up cancelling any, make sure you keep the one you've had the longest open.

And keep using them, every month. For as much as you can. Then pay them off in full when the statement is produced.

Dh and I do this - most of our spending is done on our credit cards, and I transfer the same amount to a savings account every week then pay them off at the month end.

A 0 balance but unused credit card will do you no good. A frequently used one that you pay off in full is a positive.