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Virgo

macrumors 6502a
Original poster
Jun 7, 2011
514
155
Los Angeles, CA
Back in March, I got a barclaycard to finance 2 iPads. I just finally paid them off in full, and I don't plan on using the card for anything else. I have one other chase credit card that I prefer to use (which I never keep a high balance on). But now I'm doing research and some websites say that canceling a card can negatively impact your credit score because it decreases your overall available credit line. Also my barclaycard credit limit is over double that of my chase one at the moment. Really confused as to what to do... Any advice from people who have used Barclays for financing via apple store?
 

RedRaven571

macrumors 65816
Mar 13, 2009
1,128
114
Pennsylvania
Opening and closing credit cards to take advantage of 'special' financing, or a special offer (e.g. - 20% off your first purchase), is generally considered to not be a good practice, with respect to your credit rating.

Having said that, I closed mine after my Apple purchase (an iMac) was paid off; mostly because they have a really crappy interest rate (24.99%) for all other purchases.
 

transam7816

macrumors regular
Mar 7, 2008
196
1
I don't have a Barclay but have other multiple cards from chase, citi, amex and bank of america. I like to think that I know a thing or two about credit cards and scores. It is best to leave the card open as you have already read. Say you have a balance of $1,500 on your other credit card with a limit of $2,000. And you have your barclay card with $0 balance and a limit of $3,000. Therefore you are using $1,500 out of $5,000 (using 30% of your available credit limit). If you close the barclay, you will be using 75% of your available credit limit (the lower the % the better). So you typically wanna keep your cards open even if they do have a high apr, just don't use it to carry a balance. Buy something small every couple of months and pay it off since some credit card issuers close accounts due to non-activity. Also, if the barclay card is your first credit card you'll want to keep it open. That will help your credit history.
 

MiesVanDerRobot

macrumors member
Aug 28, 2012
56
2
The card has no annual fee. It costs you nothing to keep it, so the potential upside here is zero and the potential downside is closing it could hurt your credit score.

The basic rule of thumb for credit is NEVER close an account that costs you nothing. And even for the ones that do cost something, you have to evaluate whether saving those $30 to $100 a year is worth the impact to your credit file. For someone with a lot of established, aged accounts that impact can be minimal.

But for someone whose credit portfolio is thin - e.g. only a couple of accounts like your situation - that impact can be significant.

Keep the card. "Sock drawer" it most of the time if you prefer not to use it any more. But like transam7816 said, use it for a small purchase every few months so they won't close the account for inactivity.

Moreover, since you have now established 6 months of good payment history with Barclays, consider doing one of two things:

1. Apply for their Rewards Mastercard. It has 2x reward points on gas and groceries. Not the best rewards card in the market, but pretty decent if it's better than the Chase card you already have.

2. Ask for a credit limit increase on the Apple card. Even if you never plan to make a purchase that big with it, having the extra available credit can improve your credit score by making your credit utilization level sit at a lower percentage.

Whichever of these you do, I'd wait another 6 months and then do the other.

You may be thinking "Why get a bunch of credit if I'm not going to use it?", but the reality is that credit scores don't reward you for doing things that are financially smart (e.g. never using credit and always spending only the money you have). They reward you for doing things that are financially beneficial to creditors - using credit regularly and always paying on time, never maxing out your available credit or even getting close to that, successfully managing multiple accounts without getting overwhelmed.

Your future mortgage and car payments will thank you!
 

cvaldes

macrumors 68040
Dec 14, 2006
3,237
0
somewhere else
MiesVanDerRobot's detailed comment is correct.

Ideally, you should use the Barclaycard occasionally, just to maintain account activity.

The whole point of the credit score is that it rates your ability to pay your debts. You should consider making very small purchases occasionally on the card and paying it off in full: a bag of groceries, a tank of gas, etc. This develops your credit history as the credit agency sees that you make purchases and can keep up with payments.

If you just keep it in the sock drawer and don't use it, there's really no credit history because there's no recent usage.
 

monokakata

macrumors 68020
May 8, 2008
2,031
581
Ithaca, NY
All good advice.

But for what it's worth, I cancelled my Barclay's card (a USAir one) partly because I couldn't get the USAir flights I needed by using miles, but mostly in protest of Barclay's LIBOR manipulation.

One fewer customer won't make any difference to them, but I made certain that the rep knew my reason, in case they were counting. Interestingly, she was prepared for it -- "we weren't the only bank that did that" -- which implies I wasn't the only one.
 

Virgo

macrumors 6502a
Original poster
Jun 7, 2011
514
155
Los Angeles, CA
Thanks for all your advice. Earlier I was pretty dead-set on canceling the card, because I thought it would be the right thing to do to simplify my finances and hope for a credit increase on the card I already have. But, I now see the advantages of maintaining a good credit history using both cards. I just don't want to wind up as one of those people with 10 or 15 different credit cards, and my goal is to maintain an excellent credit score.
 

ditzy

macrumors 68000
Sep 28, 2007
1,719
180
Keep it open. Just make sure that any purchases made on it will be paid with in the month.
 

WesCole

macrumors 6502a
Jul 1, 2010
756
14
Texas
Keep it open...it seems they offer that 0% for 12 months on Macs every year (or at least that is my experience with the same card)...never know when you might want to take advantage of it again and buy an iMac or something. :)
 

boomhower

macrumors 68000
Oct 21, 2011
1,570
56
Keep it open and use it once every six months for a small purchase to keep it active. Leaving it open lowers your overall utility and strengthens you average age of credit over time. Also you want to have more than one credit card. What if your traveling and Chase shuts you down? Or you lose your Chase card? I think three is the minimum. One Visa, one Mastercard, and either an Amex or Discover. With so many card exclusives around now where merchants will only accept one type of card it's useful to have one of each.
 

Penn Jennings

macrumors 6502
Apr 22, 2010
350
48
Michigan
The card has no annual fee. It costs you nothing to keep it, so the potential upside here is zero and the potential downside is closing it could hurt your credit score.

The basic rule of thumb for credit is NEVER close an account that costs you nothing. And even for the ones that do cost something, you have to evaluate whether saving those $30 to $100 a year is worth the impact to your credit file. For someone with a lot of established, aged accounts that impact can be minimal.

Be careful with NEVER. Having too much available credit, while not directly bad for your credit score, can cause some creditors to refuse to extended additional credit to you. Some creditors will compute your maximum overall credit limit. If you have enough available credit to exceed that limit, regardless of your credit score they will not extend additional credit you. It's rare but I've seen it happen.

If you only have a few cards with "normal" limits, it's not a problem unless you have a low income. You are probably better off keeping the card but there are valid reasons to close unused accounts in addition to credit ratios and security.
 

brucewayne

macrumors 6502
Nov 8, 2005
363
630
Had two barclays cards from separate purchases, cancelled them both with no detriment to my credit score. But my situation is different than yours.

Normally, since you just got the card in March, its not providing a long credit history at this point. As long as it wasn't your first credit card, and you have enough of a credit limit on your other cards that overall balances don't exceed 25-30% of that limit, you "shouldn't" have a detriment either.

Except credit is a funny thing, since you only have one other card your credit utilization ratio is going to change greatly. (i.e., if your Chase card is a limit of $1000, Barclays is $2000, and you have a $500 balance on the Chase, canceling your barclays card takes you from 16% utilization to 50%, a large jump that will most definitely affect your score.). Even if you pay it off every month, the balance on your statement is what gets reported to the agencies.

boomhower says 1 Visa, 1 Mastercard, 1 AmEx or Discover, and I tend to agree with that. Its enough credit to show you are responsible, but not so much that a lender will think you could get into trouble really quickly by maxing them all out. In addition to the reasons boomhower provides, if you rotate their usage it also makes it more likely that all 3 credit reporting agencies are being reported to on a regular basis. Some banks only report to one or two, and you could get it in a situation where you have great reports at Experian and Equifax and nothing at TransUnion.

There are much better options than the Barclays card as a 'permanent' card, lower interest rates and some sort of rewards like cash back or airline miles for a starter.

3 cards also leaves room for a 'temporary' store card (like the Barclays) that you can apply for to get a special deal. For me, it makes it easier to track my toy purchases. i.e. I won't buy a new TV until the iPad is paid off. Mixing the toys in with everyday purchases makes it easy to lose track of how much you are really spending on non-necessities.

If you do cancel the Barclays card, I recommend that you do it after you have your second (or third) card in your hand. Make sure you have a 0 balance statement from Barclays, to make sure they don't ding you for $1.19 of interest somehow. If you have iTunes points or other rewards, make sure you claim them first otherwise they will be lost when the card is cancelled.

the myfico website has a lot of free info on how to raise and maintain your credit score. their forums have tons of real world people that may be in a similar situation

http://www.myfico.com/CreditEducation/ImproveYourScore.aspx
 
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joshkevin

macrumors newbie
Oct 1, 2015
4
0
Back in March, I got a barclaycard to finance 2 iPads. I just finally paid them off in full,

The fact that you financed two ipads tells me that:
1) you should never have gotten the credit card in the first place
2) you can not afford one ipad, let alone two
 

joshkevin

macrumors newbie
Oct 1, 2015
4
0
Back in March, I got a barclaycard to finance 2 iPads. I just finally paid them off in full,

The fact that you financed two ipads tells me that:
1) you should never have gotten the credit card in the first place
2) you can not afford one ipad, let alone two
 

joshkevin

macrumors newbie
Oct 1, 2015
4
0
Your post makes no sense once, let alone twice.
Actually it does.
1) Financing electronics is not a good investment.
2) Unless there is some benefit to paying interest on something (such as owning a home with the mortgage interest deduction), then you should not finance anything. You should save up until you have the money.

Financing an Ipad is just stupid. Grow up.
 

mojolicious

macrumors 68000
Mar 18, 2014
1,565
311
Sarf London
The OP took out a Barclaycard specifically to make these purchases, which suggests that there was a decent introductory deal – 0% interest for the first six months, say. And he/she paid off the balance within seven or eight months.

Ignoring any offers or interest-free periods, at 20% APR a $1200 balance repaid at $200 per month will take seven months to clear, with a grand total of $68 in interest. That's hardly usurious.

Credit cards don't kill people, people who misuse their credit cards do. Or something.
 
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Narked Diver

macrumors regular
Apr 8, 2014
149
48
Not paying it off in full every month is misusing it.

Not if its interest free - then it makes no sense to pay it off in full

I saved enough money to buy a tv - my credit card company offered my 12 months interest free - I put the money in high rate savings account for 12 months and made a nice profit

How is that misusing a credit card?
 
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jermy4

macrumors demi-god
Jun 27, 2010
564
406
The fact that you financed two ipads tells me that:
1) you should never have gotten the credit card in the first place
2) you can not afford one ipad, let alone two
This thread is from 3+ years ago, why are you replying to it?
 
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AnalyzeThis

macrumors 6502
Sep 8, 2007
443
1
Not if its interest free - then it makes no sense to pay it off in full

I saved enough money to buy a tv - my credit card company offered my 12 months interest free - I put the money in high rate savings account for 12 months and made a nice profit

How is that misusing a credit card?
It did make sense, let's say in 1999 (8% CD), there is no such thing as "high rate savings account" for the last decade though. Carrying balance over is way worse than closing card per your request (noted on the report). Nobody cares it was interest free financing - it is not marked in the credit report data fetch. I know, it is catch 22, but it works out over years of good financial standing. Banks tend to lend money to folks who does not really need it. Same everywhere - insurance company would die to insure as many folks who does not need it. LOL Good luck!
 
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rigormortis

macrumors 68000
Jun 11, 2009
1,813
229
barclay card keeps increasing my credit limit!

i got an legitimate barclay card email that said sign for auto pay so you will have more time to listen to apple music and for a second there i thought it said i get free apple music if i sign up to autopay!

i wrote barclay about the email
they wrote back saying i should watch out for phishing scams

the last card i had with apple was juniper. i hated that card. even though i made my payments on time
they held up my credit limit for 5 days to make sure the payment was cleared. i canceled that one
 

mmomega

macrumors demi-god
Dec 30, 2009
3,879
2,089
DFW, TX
Back in March, I got a barclaycard to finance 2 iPads. I just finally paid them off in full, and I don't plan on using the card for anything else. I have one other chase credit card that I prefer to use (which I never keep a high balance on). But now I'm doing research and some websites say that canceling a card can negatively impact your credit score because it decreases your overall available credit line. Also my barclaycard credit limit is over double that of my chase one at the moment. Really confused as to what to do... Any advice from people who have used Barclays for financing via apple store?
Personally I'd just hold on to it and keep it open. Having available credit but not actively using it is generally seen as a good thing with creditors and it helps establish even longer credit history. If anything it's always there just in case.

I have one and use it as my iTunes store payment just due to the triple reward points from Apple and I'm going to be spending that money anyway, then I pay it off each month. Then every so often I get this $25 Apple gift card in the mail from barclays.
 
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