Realistic credit limits...?

protector

I'm looking to apply for a credit card soon.
At the moment I have no credit cards but I DO have credit available.

HSBC - £1500 overdraft (currently close to its limit)
Store card - £2000 credit limit - will be £0.00 balance within the next month.

As yet I've not got any idea how credit limits are decided so have no idea what kind of limits I could expect to get.
I'd have no problem closing the store card account if that would helpo matters.

I've been told (in another thread) that £3000 isn't a particularly high credit limit, but I need to know if that (or up to £5000 - though I don't really intend using that much - just would make for a safety margin) kind of credit limit would be realistic considering my current credit availability.


I would be looking for either an SBT card or Purchases (more likely the former I think)
So - realistic?
What kind of criteria are taken into consideration and what would likely be required of me to obtain this level of credit?

Debt_Free_Chick

It's very difficult to predict as different lenders have different policies on this. MBNA, for example, seem to offer ridulously high credit limits (mine is £17k!!!) and Egg are pretty good. But both seem to have a strict approval criteria too - this is their "scoring" card and they decide what counts for a high score and what doesn't.

I don't think you can ever be sure of the credit limit you are going to get until you apply and get accepted.

Also, bear in mind that some lenders take into account existing credit available in order to set an individual limit for a new card. They take the view ... "What if this person borrowed every penny available to them, including the credit limit we are about to offer them? How does that look compared with their income?" So some lenders will be cautious and offer a low limit and others will not be bothered too much and offer a higher limit.

One of those things you can't predict, I'm afraid

protector

That's a shame, getting the right limit is one of the main things I need to be sure of! :S

I'm aware that existing credit can be a problem, so I'm probably going to close my store-card when I make the last payment (some time this week I imagine)

When you say "a low limit" - how low is low? I know these things are relative - but to me a limit of 3 to 5 thousand seems like quite a high limit - wheras to others that would be a card almost not worth having.

Also when you say strict approval criteria, what kind of things do they take into consideration aside from the usual credit reference checks?
I do know that all this stuff is kept very much under wraps, but I'm trying to get a general idea.



Also - if it was deemed that I was to be given a £1000 (for example) limit, would I be able to negotiate a higher limit in turn for concessions in other areas? (ie. Higher APR after interest free period - or a shorter interest free)
When it comes down to it I shouldn't have the debt as a going concern for long at all so neither of these would be a problem.


Also when you say "this is their scoring card" - how do you mean? I thought they scored for all cards. I'm not quite sure I follow the distinction here.


Many questions I know. Thanks though

The_Boss

I wouldnt close the store card in case you are rejected - that is useful for building a credit history and as long as you have always paid on time for a period of at least 6 months, you should be able to get a new card fairly easily.

They will take your salary into account when opening a card and deciding your limit (as well as any debts and available credit), but in my experience, once you have the foot in the door, if you abide by your terms and conditions they dont seem to care and keep upping your limit every year.

Giddytimes

protector wrote:

Also when you say strict approval criteria, what kind of things do they take into consideration aside from the usual credit reference checks?
I do know that all this stuff is kept very much under wraps, but I'm trying to get a general idea.

Different companies assess you on different criteria, it depends if you fit the profile of the kind of customer they are looking to gain. They may look at things like whether you are on the electoral roll, how long you have lived at your current address, whether you are a tenant or homeowner, whether you work full or part time, number of dependants and the list goes on. It's impossible to guess which criteria each company will use and it can often change with time.

You can improve your chances of being allocated a higher credit limit by making sure that you are on the electoral roll and like you say that you don't have too much credit available but there isn't much you can do about the other criteria.

pigeonpie

Sainsburys card just arrived but with a low credit limit. Think they are on to us with the 10 month 0% on purchases deal? Plus they have backdated the card to when I applied, not when I got it and activated it, so it's effectively 8 1/2 months at 0% interest free credit as they messed up the paper work and took ages. Plus it arrived without the additional cardholder card and no PIN number as yet so still can't use it.