Balance transfers and overall credit limits

rsykes2000

Hi all, hope this makes enough sense for someone to answer
I've done a 0% balance transfer from a nearly-maxed card of 5K recently and the credit limit on the new one wasn't enough to pay off the entire balance so there was a thousand left on the initial card (and therefore remaining useable credit of 4K). So I now have 2 cards with total credit limit of 9K, which I am paying off, albeit slowly....
Is it worth me contacting the 1st lender and asking for my credit limit to be reduced so that on any credit checks in future don't show me as having access to large amounts of credit ?
Cheers for any advice.

Milarky

To be honest it's the actual debt that's most significant - and that's still there. If you have two cards with 9,000 combined limits that is not significant these days. (The fact that it's only on two cards alone tells you something about what individual lenders are prepared to lend you on your income) I don't think you would be adversely affected (on applications) until your borrowings approach 100 percent of income - which means that your credit limits alone could be 100 percent of income as a high proportion will be unused at most times and you still shouldn't be finding any problems by that stage.

[Of all lenders only Halifax seem to take the strictest line on percentage of income borrowed]

YorkshireBoy

Two schools of thought...

1. If you lower the limit, you will appear to be 'maxed out' with your borrowings - ie you have, say, a £10K limit and you owe £9.5K. To a lender, you may look to be struggling to cope.

2. If you leave the limit at it's higher level, so you now owe, say, £9.5K but your limit is, say, £16K then you may appear to be in control of your finances.

Obviously, income and other circumstances play a part in a lenders assessment of your credit-worthiness, so bear this in mind if you go with option 2.

rsykes2000

Cheers for the advice. The actual debt is reducing slowly (happily a bit quicker now less interest is being paid). Was just a bit concerned that my having several thousand pounds of additional credit available (but unused) could be seen as a negative in future credit checks.