Reducing credit limits

SarahNeedle1872

Hi guys, quick question....

If I reduce the limits of my cards as I'm paying them off, will it have a negative effect on my credit rating?

I wanna pay off the cards and reduce the limit to prevent temptation (otherwise known as OH!), but don't wanna affect my rating as I may want to apply for cards in the future (deals) and *one day* hope to have a mortgage! I'm thinking about reducing every £200 or so.

Also, will I be charged for droping my limit? Theres nothing in any of my T's and C's that suggest I would

Cheers

Sx

ElkyElky

SarahNeedle1872 wrote: »

Hi guys, quick question....

If I reduce the limits of my cards as I'm paying them off, will it have a negative effect on my credit rating?

I wanna pay off the cards and reduce the limit to prevent temptation (otherwise known as OH!), but don't wanna affect my rating as I may want to apply for cards in the future (deals) and *one day* hope to have a mortgage! I'm thinking about reducing every £200 or so.

Also, will I be charged for droping my limit? Theres nothing in any of my T's and C's that suggest I would

Cheers

Sx

You can request to have your credit limit reduced whenever you wish to and they will not charge.

However, when the reduction shows on your credit report, it will not state that you requested it. Other lenders may perceive the reductions as you being in financial difficulty or having problems with that specific card, especially if you reduce the limit on a monthly basis.

What ever lenders may think about the reductions, at least it is helping you out of debt and removing any temptations.

staffie1

Agree with Elky, but on the other hand, your combined credit limits (ie your available credit) can be perceived in a negative way by potential lenders, as, even though your may owe much less than your available credit allows, it's seen as potential debt.
You could afterall decide to go and blow the lot in one shopping trip (not that you would personally of course!).
So there is a case for reducing these limits. Having said that, your % of debt to available credit ratio would increase! So it's a tricky one.

CLAPTON

don't do it

basically you are telling your CC company that you don't trust yourself to manage your money properly (so why should they trust you either)
so you may find they reduce it more that you have requested.

if you have problem with OH then you need to sort that out anyway.

SarahNeedle1872

CLAPTON wrote: »

don't do it

basically you are telling your CC company that you don't trust yourself to manage your money properly (so why should they trust you either)
so you may find they reduce it more that you have requested.

if you have problem with OH then you need to sort that out anyway.

:rotfl:Don't worry CLAPTON, that plan is underway! I'm gonna trade him for a bird table or some other inanimate object! Very MSE:money:

I only have one CC thats not been cut in half, and thats where the temptation lies (although its meant to be for emergencies) so that will go in the freezer right now! I was thinking from an 'available credit' point of view, but when you put it like you have, it makes perfect sense!

That's that idea out the window then!

Thanks

Sx

POSSETTE

I was thinking of doing the same too...but maybe im better just closing the card i dont use and havent used for years.