How much available credit is too much?

RDG_RG1

I've heard people refer to the effect that large available credit (even on cards which are paid off month-to-month) can have on one's credit score.

I've been debt-free (other than mortgage/student loan) for a month or so now; already seeing the effects as Barclaycard have doubled my platinum credit limit. So I currently have a total of £3600 credit across a Barclaycard and Amex, on a salary of just shy of £30,000PA.

I'm aware than credit of 10% of your gross salary isn't a huge problem but I'm trying to stay ahead of the game - assuming BC keep up their tricks at what point should I consider reducing the credit available?

dhassen

Do barclaycard give you any cashback?

Seeing as your all debt free, why not get something back from the banks, get a cashback card and do all your spending on that? (paying off in full every month of course)....

just a thought - btw I wouldnt worry about 3600 worth of credit to 30K salary... i've got triple that on similar wages

Any

I've got limit on my cards of £10k on £22k salary.
I don't understand what "effect" should it have? I must have missed something.

Any

dhassen wrote: »

Do barclaycard give you any cashback?

Seeing as your all debt free, why not get something back from the banks, get a cashback card and do all your spending on that? (paying off in full every month of course)....

just a thought - btw I wouldnt worry about 3600 worth of credit to 30K salary... i've got triple that on similar wages

He doesn't seem to be worried about having a credit, he seem to be worried having the credit LIMIT if I understand him correctly..

TrickyDicky

When you are assessed for credit, they look at all factors : how much debt you are already in, how good you are at paying, and your maximum potential debt. This 3rd one is important, because this is debt you could be in very quickly by making a big purchase. You cannot prove that this will not happen - the best way to mitigate the problem is by reducing your credit limits.

Ofcourse, your maximum potential debt can be offset by your income.

LongTermLurker

Your mortgage and loan repayments will be borne in mind, but all things being equal, £3.6k on £30k income is small. You need to consider how much disposable income you have, and the card companies will work in a similar way.

dhassen

Any wrote: »

He doesn't seem to be worried about having a credit, he seem to be worried having the credit LIMIT if I understand him correctly..

that's exaclty what he's worried about and that's exatcly what I've refferred to.... think you're getting confused there any

RDG_RG1

Yeah, dhassen was right. I just wanted to know what percentage of income is considered to be hazardous amounts of credit, because my mum (who is debt-free and gets her income primarily from my dad, who earns in excess of 100k) was recently turned down for a credit card.

She got her experian report and it transpired that she'd had the credit limits on two of her cards doubled and it was this POTENTIAL debt which was making her a bad risk.

The barclaycard does give cashback, so it's useful for places where Amex isn't accepted Thanks guys

Any

TrickyDicky wrote: »

When you are assessed for credit, they look at all factors : how much debt you are already in, how good you are at paying, and your maximum potential debt. This 3rd one is important, because this is debt you could be in very quickly by making a big purchase. You cannot prove that this will not happen - the best way to mitigate the problem is by reducing your credit limits.

Ofcourse, your maximum potential debt can be offset by your income.

But there was another thread recently where people were advising the OP NOT to close his credit cards he was not using as that would reduce his rating???
http://forums.moneysavingexpert.com/showthread.html?t=1178015&highlight=cancel+credit+card%3F

Any

dhassen wrote: »

that's exaclty what he's worried about and that's exatcly what I've refferred to.... think you're getting confused there any

Sorry, that was your wording that confused me.
You use "how much credit" while the OP used "how much limit" so I didn't get your answer:beer:

Chris2000

RDG_RG1 wrote: »

I'm aware than credit of 10% of your gross salary isn't a huge problem but I'm trying to stay ahead of the game - assuming BC keep up their tricks at what point should I consider reducing the credit available?

Available credit allegedly contributes to the credit score, but so do many other factors. It's impossible to generalise - my available, unused credit is well over 100% of gross earnings and it hasn't caused me a problem getting new cards.