Question: I’ve used several balance transfer credit cards to make use of the interest-free periods. In most cases I have kept the accounts open zero balances. Is this the right thing to do or could it damage my credit rating?

Having several credit card accounts can lead to lenders worrying about your potential ability to run up large debts, so it is sensible to close credit card accounts when you no longer intend to actively use the cards, if you are considering applying for a large loan, a home loan for example.

However, if you have transferred a balance to a balance transfer credit card and are able to keep your old credit card account open it is a better idea to keep it open and use the card for any new emergency situations rather than adding new purchases to the card that carries the outstanding balance.

If you decide to close credit card accounts it is important to formally notify the credit card issuer that you are closing the account, rather than simply cut-up the card.

Another risk of having credit and debit cards that you no longer use is that you may forget to notify the issuer when you move.

Failing to do that opens you up to the risk of fraud if a replacement card is delivered to your old address.

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