Does cancelling cards after points negatively effect future chances of getting a CC?

[tocal]

A lot of people have sort of, in some way, asked this question, but usually it's thrown in with other questions, and whether we have a credit rating system in Australia, etc. I've read these threads:

http://www.australianfrequentflyer....s/new-credit-reporting-changes-new-36102.html
http://www.australianfrequentflyer..../advice-credit-cards-impact-credit-33312.html
http://www.australianfrequentflyer....discussion/cancelling-credit-cards-41498.html

but still haven't really gotten a clear answer.

So I put a single question to you: does cancelling cards after meeting the requirements (i.e. minimum spend) and getting your bonus points negatively effect your future chances of getting a CC?

 

[burmans]

Re: Does cancelling cards after points negatively effect future chances of getting a

A lot of people have sort of, in some way, asked this question, but usually it's thrown in with other questions, and whether we have a credit rating system in Australia, etc. I've read these threads:

http://www.australianfrequentflyer....s/new-credit-reporting-changes-new-36102.html
http://www.australianfrequentflyer..../advice-credit-cards-impact-credit-33312.html
http://www.australianfrequentflyer....discussion/cancelling-credit-cards-41498.html

but still haven't really gotten a clear answer.

So I put a single question to you: does cancelling cards after meeting the requirements (i.e. minimum spend) and getting your bonus points negatively effect your future chances of getting a CC?

Not in general but the CC provider you've dumped might not be so keen, at least for next year or so! Most will be unaware you have dumped. The only exception to this is if you are making multiple applications in a short time, as some lenders interpret this to mean you have been rejected elsewhere!

 

[lovetravellingoz]

Re: Does cancelling cards after points negatively effect future chances of getting a

.

So I put a single question to you: does cancelling cards after meeting the requirements (i.e. minimum spend) and getting your bonus points negatively effect your future chances of getting a CC?

Well I have churned many cards, and often with the same companies. So in my case no.

However I am subtle about it, and do not get rid of cards immediately after posting. Between my wife and I, we have probably clocked up close to a million points from CC-sign on bonii, and 400K in just over the last year.

The cc suppliers t&c is tighter now....though never as generous as what was achievable in the USA.

The Qantas Amex was one a few years back where the two of signed up @ for from memory 37.5 K of bonus from sign on and minimum spen. It was a fee free card to sign up. Then cancel and reapply for another 75 k within 6 months, and so 150K for $0 cost.

 

[markis10]

Re: Does cancelling cards after points negatively effect future chances of getting a

With the changes in credit reporting, it might actually be beneficial to cancel inactive cards.

 

[tocal]

Re: Does cancelling cards after points negatively effect future chances of getting a

Thank you - three really concise answers. I only plan to do it for decent offers (20k+) so I doubt it'll be happening that often, but this information is definitely good to have. Thank you!

 

[burmans]

Re: Does cancelling cards after points negatively effect future chances of getting a

With the changes in credit reporting, it might actually be beneficial to cancel inactive cards.

At least partially true, there are two conflicting elements at play here. Being able to show a good record of payments on a long open account is generally regarded as predictor of good behaviour however under the new laws most credit providers (those that participate in comprehensive reporting) will be able to see
- all accounts you have open, when opened, the credit history (i.e. have you met payments last 24 months) and your credit limit (NOT the balance)

If you have a lot of accounts with overall a high limit this will affect how much lenders will lend to you. The fact you aren't currently using is irrelevant to them, this money is available to lend. So you may need to close account(s) to reduce, alternately you can also ask lenders to reduce your limits which has same impact. If you have a long standing low or zero fee card I'd be doing this rather than cancel.

 

[burmans]

Re: Does cancelling cards after points negatively effect future chances of getting a

400K in just over the last year.

Thats impressive, I haven't managed to find that many good offers this last year, the 20K or so ones just don't appeal!

 

[lovetravellingoz]

Re: Does cancelling cards after points negatively effect future chances of getting a

Thats impressive, I haven't managed to find that many good offers this last year, the 20K or so ones just don't appeal!

90	Amex Plat
90	Amex Plat
40	Amex refer a friend (wife)
60	Citi Plat
40	Citi Bus
40	Citi Bus
25	Amex Edge
20	ANZ
16	Everyday
16	Everyday
437	TOTAL