Getting a higher credit card limit?

spaceraiders

I applied for my first credit card with the Halifax this week to get into the stoozing game. I'm doing a postgraduate course, will have no income for about 1 year but have a large amount of savings. To my dismay, I was only offered a £500 credit card limit even though I've never been in debt or payed any payments late (I assume I have an untarnished credit score). What can I do to increase my credit limit? The Halifax said I could request more credit in 6 months time. I suppose I could ask some other banks.

My friend suggested that I should spend to the limit on the Halifax card and make all the payments on time to improve my credit score by showing the bank I'm clever with credit. Does this work?

NickX

spaceraiders wrote: »

I've never been in debt or payed any payments late (I assume I have an untarnished credit score)

Your problem here is that aswell as having no income at present, you have never had a Credit Card or even been in debt before. This means that you do not really have a history of using credit.

Not having a history of using credit does not equate to a high credit score, because the Card Companies want to see some evidence of handling credit well.

Your friend is partially correct, but you do not need to max the card out. Just use it every month for items you would buy anyway (supermarket shopping\petrol etc), and then pay it off in full and on time every month. This will help build your Credit Rating and slowly your Credit Limits will rise and you will be able to get the limits and promotional rates required to stooze effectively.

Good Luck.

spaceraiders

NickX wrote: »

Your friend is partially correct, but you do not need to max the card out. Just use it every month for items you would buy anyway (supermarket shopping\petrol etc), and then pay it off in full and on time every month. This will help build your Credit Rating and slowly your Credit Limits will rise and you will be able to get the limits and promotional rates required to stooze effectively.

Thanks. Given my £500 credit limit at the moment, is it OK to max it out, pay the minimum fee each month and then pay it off at the end of the 0% interest period (in terms of credit score)? Would I get a better credit score getting another 0% from another bank too for the same period and doing the same with that?

I've never thought about credit cards in a good way before because you only ever hear about their negative aspects in the media. I always thought the idea is that the bank is trying to trick you into paying fees to make them rich.

YorkshireBoy

spaceraiders wrote: »

Thanks. Given my £500 credit limit at the moment, is it OK to max it out, pay the minimum fee each month and then pay it off at the end of the 0% interest period (in terms of credit score)?

Yes, but don't buy for the sake of buying!

Would I get a better credit score getting another 0% from another bank too for the same period and doing the same with that?

The satisfactory management (as verified by a credit search) of two accounts, rather than just one, would 'score' you better with anyone searching your file I would *think*.

spaceraiders

YorkshireBoy wrote: »

Yes, but don't buy for the sake of buying!The satisfactory management (as verified by a credit search) of two accounts, rather than just one, would 'score' you better with anyone searching your file I would *think*.

Yes, I intend to spend within my means. :-) The idea was to put a few £1000 in an easy access high interest account, use the credit card for weekly spending and monthly bills, and setup a direct debit to pay off the minimum. There isn't much point with a £500 limit though as it'll be easy to go over e.g. when the mortgage payments come up.

If it gets my credit score up, I could get another card (or two!), max it out, setup a direct debit to pay it off and leave it alone for the 0% interest period.

YorkshireBoy

spaceraiders wrote: »

There isn't much point with a £500 limit though as it'll be easy to go over e.g. when the mortgage payments come up.

You'll probably find you can't pay your mortgage on a credit card.

spaceraiders

YorkshireBoy wrote: »

You'll probably find you can't pay your mortgage on a credit card.

You mean you aren't allowed to setup direct debits from your credit card or that banks don't allow you to pay by credit card? Or are you just being funny by implying that you shouldn't try to pay a whole mortgage via credit card?

YorkshireBoy

spaceraiders wrote: »

You mean you aren't allowed to setup direct debits from your credit card or that banks don't allow you to pay by credit card?

Both.

Firstly, direct debits are not allowed...although continuous payment authorities (CPA's) are used for things like insurance and RAC/AA breakdown cover etc.

Secondly, you generally* can't pay credit with credit (balance transfers excepted). If you ask your mortgage provider to pay by credit card you'll most likely set off alarm bells ringing because they'll think you're struggling and don't have funds in your current account. Usually mortgage providers insist on a direct debit being set up. If they do accept a card payment for one month, then the DD will need to be cancelled and set up again the following month.

* It's been posted previously that some mortgage providers (Abbey?) will allow it, but there's a lot of hassle involved with manual intervention being required to overide the automation that DD affords.

Or are you just being funny by implying that you shouldn't try to pay a whole mortgage via credit card?

Er, no.

spaceraiders

OK, thanks for the tips! I would have thought the banks wouldn't care where they got the money from as long as they got it.