Should I Cancel My Credit Card?

LHeya12 on 27/02/2023 - 14:33

This is my first time owning a credit card and I'm not sure what the correct move is. I currently have a credit card with citibank and have met the minimum spend to get the signing bonus. The reason I want to close it is that I think that it should free up my credit so that I can apply for another credit card in the future, such as from citi, to get another sign up bonus. However, I'm getting mixed messages from the internet on whether this is true. Some say closing a credit card can hurt credit scores while others say you can't have too much credit at once time. So what's the consensus?

Will closing my credit card now open up my chances of applying and being approved for a new credit card? How long should I wait before applying again?

Financial Credit Card

Comments

  • silenthillrocks on 27/02/2023 - 14:37

    No

  • Drakesy on 27/02/2023 - 14:39
    +4

    Yes

  • MS Paint on 27/02/2023 - 14:39
    +12

    If you're a real ozbargainer:

    • Earn $200k pa
    • Own your home outright
    • Have 3 self managed investment properties
    • Drive a model Y 3 S
    • 45 kw solar system with eneloop Tesla batteries

    Then keep the card. You'll be fine.

    MS Paint on 27/02/2023 - 14:39 (Collapsed - Offtopic. Show)
    • Gunnar on 27/02/2023 - 14:49
      +34

      Real Ozbargainer Reality:
      * Earn $20 an hour doing dawn fill at Woolies
      * Live with your parents
      * Have 3 self managed KFC apps to make the most of cheap fried chicken deals
      * Drive your parents' Hybrid Camry
      * Have a lifetime supply of Eneloops that you will never use

      • Xistn on 27/02/2023 - 14:53
        +16

        We forgetting to cook at the park?!?!

        • silenthillrocks on 27/02/2023 - 15:41
          +1

          This comment is the mvp

        • DoctorCalculon on 27/02/2023 - 23:18
          +1

          Also, good mates with bikies for dispute resolution.

      • StephBlanks on 28/02/2023 - 13:55
        +2

        (know a guy) shower at work/the pool when the kids taking swimming lesson

      • tooblue on 01/03/2023 - 15:14

        What's wrong with Hybrid Camry? I am saving the planet.

  • Motek Benzona on 27/02/2023 - 14:44
    +1

    You never know when you might need to hire bikies at short notice..keep it

  • SnowDragon on 27/02/2023 - 14:57
    +2

    Will closing my credit card now open up my chances of applying and being approved for a new credit card?

    No, as long as you are eligible for a CC then banks will graciously extend the offer out.
    I have closed 3 CC accounts in the past 12 months - according to Finder my credit score is "Excellent"

    How long should I wait before applying again?

    No need to wait. If you are doing it solely to meet min. spend for the bonuses then you're usually ineligible for the card you used for 12 months.

    This page will probably answer all of your questions.

  • JMosk on 27/02/2023 - 15:06

    Wait until the signing bonus hits your account and then close the credit card

  • CodeXD on 27/02/2023 - 15:10

    When I churn, I prefer to make sure I have the new card first before closing, so I am always getting points for my purchases.

  • Ash-Say on 27/02/2023 - 15:15

    Why not change your card to Citi rewards or other card which allows CitiPayall.

    This way you not only earn reward points but also get free money parked into your offset/savings account for few days.

  • Donaldhump on 27/02/2023 - 15:26

    depends on your salary / assets. i have 4 on the go about to get a 5th, but will close 2 soon.

    don't see how closing a credit card reduces your score, but if people say so maybe it does
    don't see why having more than 1 is an issue aslong as you can pay it and convice the next cc provider you can too, but to minimise 12 month gaps no point having if achieved bonus

    • hasher22 on 27/02/2023 - 15:47

      It depends really, signing up for multiple credit cards over time such as 1 per year shouldn't be a problem but may become a problem in the future, but signing up to 2 or more at the same time can be a problem as well.

      I guess we would never know the true rules of applying cause I applied for 2 at the same time when I was 22 (stupid me not knowing finance and credit scores) and I got knocked back on both even though I wanted the minimum at 2k at the time. I found out that applying for 2 at the same time is a big no no and I learnt my lesson as one bank said do not apply at the same time with multiple banks as they can see this as a risk.

      I only have 1 credit card and it's nothing special, I don't do alot of spending so a 0 annual fee credit card just to take out bills from then I pay it in full at the end of each month, and that limit is only 1k.

      • Donaldhump on 27/02/2023 - 15:59
        +1

        ok so don't sign up to 2 or more at the same time.
        neither me or OP suggested to do so.

        having more than 2 at the same time is no big deal, its all relative to your income and assets. ie do you earn 30k or 200k, do you have equity in a house

        • hasher22 on 27/02/2023 - 19:43

          Never suggested you or the OP to do so, I just added a scenario where you or the OP could be facing if you do cancel a card then decide to apply for your next card, and you may apply for 2 at the same time for whatever reason.

      • Ghost47 on 27/02/2023 - 18:48

        I found out that applying for 2 at the same time is a big no no and I learnt my lesson as one bank said do not apply at the same time with multiple banks as they can see this as a risk.

        Do you (or anyone here) know what an acceptable timeframe is then? One month after the original application or something?

  • Keplaffintech on 27/02/2023 - 19:15
    +2

    I've been churning for years and have had maybe 5 cards simultaneously at one point. Here's what I know from experience:

    • Salary is king. If you can afford it, the bank will approve it. History of many credit cards, active or closed, doesn't make a difference if you have the salary to cover the card.
    • Banks calculate the limit based on your income minus expenses, and have some formula to determine the repayments of the debt at the credit card limit. I don't know the formula, but as long as you ask for a limit that is less than you can afford, you can have the card, regardless of how many cards you have. Some banks like CBA will tell you the max limit when you apply so you can use that as a rough guide for your max total limit across all cards.
    • Banks don't care if you're a serial churner, they'll give you that card in the hopes that you'll one day be unable to pay it off in full.
  • randomusername2017 on 27/02/2023 - 20:15

    owning a credit card

    The card remains the property of the financial institution
    User has authorised use to access attached revolving line of credit..
    Without due care the bank will own you.

  • coffeeinmyveins on 27/02/2023 - 22:05

    Will closing my credit card now open up my chances of applying and being approved for a new credit card?

    Yes

    It makes sense right? If you have a 5k credit card now and you apply for another one then the new one will see your 5k as liability and count against you

  • RTY on 28/02/2023 - 14:58

    Also have the similar question. I have westpac cc $6k limit and bank of melbourne cc $6k limit. Closed bom cc this month. Checked commbank credit score and it still says bom cc open, and credit score unchanged.
    I don't know how often does bank report closed cc, as I plan to apply for ANZ qantas FF black as next card and the min. credit limit is $15k. Don't know if I can apply now or wait when credit score/report updates.

    • leigh8904 on 02/03/2023 - 05:48

      As long as you have some sort of official CC closure notification from BoM, you can go ahead and apply for new card with ANZ. In the application you list any existing credit cards: you only list the Westpac one. ANZ will perform a credit check and discover the BoM CC, and ask you for confirmation about it. You supply the closure notification, application proceeds.

Login or Join to leave a comment
Login Join