To payy of half of 4 credit cards or 2 credit cards in full

[newtothis15]

I have been applying for remortgaging and I've got about four credit cards on 0%. I feel with my defect my credit score because it's called a desert unsecured debt.

I wonder whether to pay off which I can half of 4 credit cards or is it better to pay off and close completely 2 Credit Card?

I'd say pay off half of all four, as that would lower your credit ratio. But if you're going for a mortgage, you really need to get rid of all

Which ones will have the highest rate of interest when the 0% ends?

When does the 0% end on the cards?

As they are all interest free I’d be paying half of everything. I’ve found that my credit score is higher when I’m using less available credit. Much better to have 5k out of a possible 10k than 5k out of a possible 5k.

Pay half of the four, then your credit report will show you as using 50% of your available credit, don't close the accounts.

Also before you repay you need to chat with a mortgage adviser and check affordability with what you have because it may not impact your borrowing as much as you think.

Who needs 4 credit cards apart from people in over their heads with debt?

I would pay off 2 completely then you’ve only got 2 to worry about managing.

I have four credit cards. I use them for different things, some get me free flights, others give me vouchers. I pay them off in full each month and I’m not in any debt.

But if you're going for a mortgage, you really need to get rid of all.

I would pay all off two. To apply for a mortgage you need to have a good credit history and show you can manage debt. It would be harder to get one if you had never been extended credit before.

Debt Snowball - pay off smallest to largest.

m.youtube.com/watch?v=0aUIQ6W2HgM

For mortgage approval purposes I wouldn't keep 4 cards. I would pay off as much of the unsecured debt as possible, closing accounts, so paying off in full as many of the cards as possible.

The mortgage lender is interested in: can you afford the repayment amount, and can you afford that in a stress test scenario (using whatever increased mortgage rate they use for stress test). Any other debt payments reduce the amount of money you have to pay towards the mortgage.
Paying off cards will help show that you are taking the debt seriously and paying it off, not making payments and leaving it so you can add debt easily later.

Pay off half of each. Your credit score will look better if you're not using over 50% of your available credit on all accounts.

No. If you're using over 50% of one of your credit accounts it reduces your credit score. Better to have only 50%!of each in use.

But what about when you fill out the mortgage application and have to admit to having 4 credit cards? Surely that makes it look like you are struggling to manage your money if you needed to take out 4 which is an unusually high number.

@Rainbowshit

Yeah so have 1 credit card and don't have anything on it except now and again. You shouldn't be living with a constant balance on any card

I think both of you are naive to the number of credit cards people actually have.

You're taking about what you think rather than actually knowing about how the credit scoring works.

The cards are 0 per cent so i thought to utilise it ratger yhan from current account

When does the term end on these 0% cards though? Once the 0% period ends, although the quoted APR doesn't look as high, I know that I'm paying more interest on each £100 of credit card debt than when I go overdrawn. I used to be quite good but got into a bit of a mess, and am now hoping to pay my cards off. I've just paid off my mortgage and am not applying for another though, so I'm looking at trying to pay off more sooner to get rid of the debts and pay them off.

Try to break the habit of putting day to day spending on your cards - if you haven't already, you will get to a point when you've effectively spent your income before you get it, and while it might seem affordable now, if your circumstances change, this is grim.

Make sure that you have the minimum payment at least set up by direct debit on all of them now. Add up your outstanding debt. Add up your current minimum payments. How much can you afford to repay each month? At each, look at when your 0% ends - if you don't make more than the minimum payments, you will be paying more in interest, charges etc than you will on the credit cards. then it will take forever to pay them off. Credit card companies are supposed to warn you if they think this is happening to you and you are getting into persistent debt. Also, look at the interest rates - I hadn't even realised that one of my cards has over 26% APR, compared to 18+% and 19+% for the others - at my age I really should know better.

Try to get your regular outgoings like food shopping off your cards back on to your current account before the 0% ends, and work out how much is left after rent, essential bills, food and other necessary stuff out of which to make your repayments. Then I would suggest paying off the most expensive debt first - for example, if one ends months before the others start trying to reduce it first before the 0% term ends. If you have to pay interest on more than one or all soon, then once you've made minimum payments, I would prioritise the one with the highest APR.

Exactly as @nannynick said.
Pay credit cards off one by one starting with smallest owed. What people often neglect is the psychological power that paying off one card brings. It's one less thing to worry about. If you crunch the numbers you may find that you will be slightly better off with a different strategy. But this way is more motivating, you see the reward of your hard work and with it you will have a greater chance of becoming debt free. Dave Ramsay talks a lot about this.

In Australia the full credit limit on each card is subtracted from the loan offer, so it may be better to pay off either way, then reduce the limit for all 4 cards. The following is from an Australian loan management site

When it comes to credit cards, lenders will take into consideration your entire credit card limit rather than your outstanding credit card balance when determining how much you can borrow. This means if you’ve only spent $1,000 on your credit card, but your credit limit is $20,000 - your borrowing power will likely be reduced by the $20,000 limit.

Thats interesting i am in uk and not sure how this is interpreted in uk ir spending half of credit cards

In the UK it depends on affordability calculations for the lender. Some will assume a 3% minimum payback per month each and others 5% or more (previously been a mortgage adviser). How they then calculate affordability is within their own underwriting process.

This is why I said pay the cards off that have the least time left on 0%. Of course if that leaves you with a high balance still if you can afford it it's worth reducing them too.

Also, I'd speak with a mortgage broker. Either L&C or John Charcol are good. The mortgage adviser will be able to go through affordability and tell you if you need to repay what you need to repay.

Most of the answers here are responding as though the OP is struggling with the debt - this isn't the question asked by the OP.

@newtothis15 what you need to know is how your potential lender will view four CCs vs two CCs - this is NOT the same as credit score. Mortgage lenders are looking at affordability, but some will also look at your exposure to credit based on what would happen if you maxed out all four after getting the mortgage (obviously worse than if you maxed out two!). The advice to check with your mortgage broker, if you are using one, is sound. But I would use the MSE forums ( category: Mortgages and homes; sub cat: mortgages and endowments) there are some really well-informed posters - often with industry experience.

Thank you

I understand that OP isn't asking how to deal with credit card debts because she feels she's struggling, but I think not only having 4 credit cards but having balances on all of them offers potential to run into problems. If it doesn't mess up the credit card rating and someone gets a mortgage, will it all still feel manageable when those 0% interest rates come to an end? Borrowing some money and paying it back fairly quickly, cheaply and painlessly may be good for your credit score, but borrowing an amount that will take several years to pay back once interest kicks in doesn't seem like a good idea and I think people need to consider the effect on their overall finances (outgoings relative to income) as well as the credit score in itself.