Credit Card - switching at end of 0% period

Colgates_shaving_foam

Well-known member
Maybe daft question but if you have got the balance on your card down to zero by the time the 0% on purchases offer ends what is the best way to switch to a new card with 0% on purchases?

Is it best to just close the existing card and start from scratch? As if you apply whilst it is still open any application will be negatively impacted by the existing credit limit on the current card at zero balance?

Any thoughts from the board financial gurus?
 
Maybe daft question but if you have got the balance on your card down to zero by the time the 0% on purchases offer ends what is the best way to switch to a new card with 0% on purchases?

Is it best to just close the existing card and start from scratch? As if you apply whilst it is still open any application will be negatively impacted by the existing credit limit on the current card at zero balance?

Any thoughts from the board financial gurus?
Shouldn’t really matter from a credit score perspective. Part of your score is made up of % of credit usage. For example if you have 10k worth of credit limit, and use 3k then you’re using 30% - which would be regarded as low usage / risk.

Obviously, with 0% usage this will work in your favour. As to whether to close down the second card is personal choice as to whether you think you’ll ever bother want to use it again. Seems expensive if you won’t get any offers on it.

For the new card just use a comparison site or Experian if you subscribe, they’ll give you a the best cards available for your requirements and most give a % chance of approval or pre-approved offers.
 
Maybe daft question but if you have got the balance on your card down to zero by the time the 0% on purchases offer ends what is the best way to switch to a new card with 0% on purchases?

Is it best to just close the existing card and start from scratch? As if you apply whilst it is still open any application will be negatively impacted by the existing credit limit on the current card at zero balance?

Any thoughts from the board financial gurus?
It’s not often as simple as that. If your salary is comfortably enough to cover all of your credit cards, loans and mortgages, closing an account might even reduce your credit score. This could happen if for example you close an account with no balance and you have another credit card which has a balance close to its limit. This is because the banks will look at your available credit and see that you’re using almost all of it. Especially if you’re not paying it off in full each month or you have missed payments before.

However if the card you’re closing has a high credit limit up to around half your salary, it’s less likely you will be approved for more credit. In this case it would probably be best to close the account before applying for a new one.

Remember it can take a month or two for your credit file to be updated too. So don’t apply immediately after closing the account if that’s what you decide.
 
Just apply for a new CC on 0% purchases, no point in closing the old one if you've managed your accounts well (not missed payments). Your old card will help reflect a low credit utilisation if it's at £0, I've worked at 2 of the big CRA's.

.... obviously feel free to close the card some time in the future if you're no longer going to use it but it won't really impact an application.
 
Once you have a new credit card approved I would close it down. Available credit could have some effect on your credit, as your utilisation become a smaller percentage. In addition if you have 50k available you could effectively spend that tomorrow so your future risk is also higher
 
Maybe daft question but if you have got the balance on your card down to zero by the time the 0% on purchases offer ends what is the best way to switch to a new card with 0% on purchases?

Is it best to just close the existing card and start from scratch? As if you apply whilst it is still open any application will be negatively impacted by the existing credit limit on the current card at zero balance?

Any thoughts from the board financial gurus?
i've paid off credit cards in the past and closed the accounts then when tried to get them back got refused, even though my credit was much much better, so I'd just leave them unused just incase, eventually they will reduce your credit limit if they are at capacity for their lending budgets

it's all down to what ever you want to do really , there is pros and cons of keeping it there and closing it off, both can effet your credit in different ways for the positive and negative, without seeing all your finance details its hard to say whats best for you and how it will change your score
 
Thanks for all your thoughts. I think I will apply for a new one and leave the old one open at zero balance for now then. Just in case I don't get approved for a new one for whatever reason.
 
Each company will use the data from the Credit Reference Agency in different ways.

Some will want to see credit accounts that have been managed correctly.
Others dont want to see you have availability to too much credit.
Others want to understand if you are going to be a profitable customer. They dont make money if you pay off in full every month.

I used to make the credit scorecards that the major banks used, a lot depends upon how they use the products to attract customers. The big banks want to retain customers by offering a suite of products. Others are happy to churn new customers and so offer different ways of enticing your custom.
 
Each company will use the data from the Credit Reference Agency in different ways.

Some will want to see credit accounts that have been managed correctly.
Others dont want to see you have availability to too much credit.
Others want to understand if you are going to be a profitable customer. They dont make money if you pay off in full every month.

I used to make the credit scorecards that the major banks used, a lot depends upon how they use the products to attract customers. The big banks want to retain customers by offering a suite of products. Others are happy to churn new customers and so offer different ways of enticing your custom.
Surely they make money from merchant fees. I pay my card by direct debit every month.
 
Each company will use the data from the Credit Reference Agency in different ways.

Some will want to see credit accounts that have been managed correctly.
Others dont want to see you have availability to too much credit.
Others want to understand if you are going to be a profitable customer. They dont make money if you pay off in full every month.

I used to make the credit scorecards that the major banks used, a lot depends upon how they use the products to attract customers. The big banks want to retain customers by offering a suite of products. Others are happy to churn new customers and so offer different ways of enticing your custom.
Ideally from my perspective my current card provider would just extend my 0% period but I guess what they really want to happen is that I spend on it prior to going to the kerching rate and then I pay them interest?
 
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