Egg’s decision to cut off 161,000 customers’ credit cards will not harm their credit rating, a leading agency has said.

Credit reference company Equifax say your credit file does not log whether a card has been withdrawn, only whether it is open or closed.

If a closed account has a cleared balance it will be recorded as ‘settled’ which will improve a person’s chances of getting a new credit card elsewhere.

“We log that you have paid off a credit card balance, which will look good in the eyes of lenders,” said Equifax’s external affairs director Neil Munroe. “You should never leave a card open once you have moved the balance as the lender will only see the number of cards in your name.”

“If you have too many cards you may be seen as too much of a risk,” he added. “The Egg closure may also help you by reducing your card number and increasing your creditworthiness.”