How do credit card lenders decide what limit to give me

nosha123

Please help. I need to know - How does a credit card company decide what limit to give me?

I have some credit cards now with balances owing all at 0% rates.
I also have some cards with nothing owing.

If I am looking to get another new 0% card in 6 months time - should I close the cards now that I dont use? WIll that make them look more favourably at me than if I had say a Halifax card with zero balance but a limit of £10,000 avaiable to spend.

When they credit check me - do they look at the total amount of my credit card limits (ie what I could potentially spend up to) and then decide what to lend based on that and my income?
Or do they look at only what is outstanding on those cards?

Moggles_2

How many is "some"?

The national average is five, so if you have five credit cards or fewer and none is maxed out, it's unlikely your credit rating would be harmed by keeping these cards, unless you have a lower than average annual income. If you're still getting the cards and credit limits you want, I wouldn't rush to close accounts down.

That said, with each successful credit card application, your available credit will increase in relation to your income and there will come a point in the future when you must consider closure.

Just be aware that in addition to the number of accounts in use, lenders look at the
extent their credit limits have been utilised. Maxed out accounts make you look stretched,
so if you're planning to apply for market-leading BT cards, it's wise to leave plenty of headroom

exel1966

nosha123 wrote: »

Please help. I need to know - How does a credit card company decide what limit to give me?

It will be based on your overall rating taking into account factors such as past history, current available credit, current debt level, advised income level, ratios of these against each other and finally who the company is that's providing the credit as some are more generous than others.

izools

Moggles wrote: »

How many is "some"?

The national average is five

Don't get mixed up, the national average of accounts is five.

So that's one Mobile Phone, two credit cards, two current accounts, that's your five financial accounts on your credit report. (Well that's what I have on mine atleast)

Five credit cards + whatever else you have, is WELL OVER the national average!!

mark55man

I just started a couple of new ones one 0% purchase as we are refitting a kitchen, and one for a balance transfer for my remaining debt. At the same time I just closed the couple I had - after the BTs had gone through.

I am not sure it is essential, but the way I think about it, when my 9 month (purchase) and 15 month (transfer) run out, I will have at least 6 months clear space on my report, and I always repay a bit more than minimum balance - to speed up the snowball, and I was told it does help

HTH

NickX

izools wrote: »

Five credit cards + whatever else you have, is WELL OVER the national average!!

I don't think so, I agree with Moggles that 5 cards is the average.

I once had 14 cards at the same time.

izools

NickX wrote: »

I don't think so, I agree with Moggles that 5 cards is the average.

I once had 14 cards at the same time.

As soon as I opened my second Barclays account, which brought the total number of open financial accounts to 6, my Experian score changed from saying "You have few credit agreements and your outstanding balance is low" to saying "You have multiple credit agreements and your outstanding balance is high".

Now, my amount owing or debt : limit ratio didn't change, but my number of financial accounts did. Just going on what I've seen on CreditExpert

(Yes, I know the score itself is meaningless in the real world...)

binaryuniverse

Pretty sure the average cards held is 5. Me personally I've got 6 credit cards, 3 current accounts and a contract phone.

Ritchie74

Every company is different, the bank I work for uses Delphi score (Experian bureau score) to decide limit at origination (eg x <= Delphi < y = £1000 limit and so on)