Reducing credit limit

Cloudy456

I've recently transferred over half of the balance on a nearly maxed credit card to another one on a 0% deal, meaning that the first card now has a balance of about £2800 but the credit limit is £7500. I'm thinking about asking Barclaycard to reduce this to more like 3k or 3 and a half, as it would mean that the total credit available to me on my credit report is reduced; however I am a bit concerned about asking for a reduction - is this a good idea? I don't want to flag myself up as a person who can't handle my account or something and bring the account to their attention so they increase my interest rate or something! Does anyone know of any reason why asking to have a credit limit reduced is a bad idea?

Any thoughts on this would be very welcome!

Thanks

Cloudy456

Bumping my own thread! If anyone can help I'd really appreciate it, thanks!

BigCraigJohn

I dont think it'll do any harm, unless i'm mistaken it makes you look more responsible if anything and gives you less temptation.
Unless i'm mistaken the only people who will know youve lowered the limit are that lender.
Remember lenders want your debts so will look for reason to keep you not the other way round.

Wee_Jo

Hey Cloudy :hello:

I don't think it would have a negative effect at all, as far as I am aware (though I could be wrong) it's increasing your credit limit that would effect your rating, as you are seen to be looking for more money.

I reduced my overdraft down a few weeks ago to avoid temptation as well! I went into my branch (although you can do it over the phone apparently) and asked them to reduce it, they said how much did I want to reduce it by, I told them how much, they tried to sell me another account with a free overdraft, I said no (hello?? Trying to be responsible here, work with me!) and they did it. A few days later I got a letter confirming the change, although it was effective immediately when I looked at my accounts online. That was with H@lifax.

Good luck! :money:

Jo

Poosmate

Hiya Cloudy, I once posted on here that I was reducing my available credit every now and again as my debt reduced. Like you I thought I was acting responsibly. However, someone advised that doing that wasn't always best and I can see the logic in it.

I was told that by reducing the credit available to me, if I wanted to apply for a CC for a 0% deal the CC companies may look upon it as me being close to my available credit limit and so being desperate to get more.

As I said, I can see the logic in that so if I was in your situation I may reduce the credit limit to maybe £4k so you have £1.2k credit available to you (purely for show of course) rather than £200-£700.

Good luck in reducing your debt and becoming debt free fast!

Poo

Wee_Jo

Poosmate wrote: »

Hiya Cloudy, I once posted on here that I was reducing my available credit every now and again as my debt reduced. Like you I thought I was acting responsibly. However, someone advised that doing that wasn't always best and I can see the logic in it.

I was told that by reducing the credit available to me, if I wanted to apply for a CC for a 0% deal the CC companies may look upon it as me being close to my available credit limit and so being desperate to get more.

As I said, I can see the logic in that so if I was in your situation I may reduce the credit limit to maybe £4k so you have £1.2k credit available to you (purely for show of course) rather than £200-£700.

Good luck in reducing your debt and becoming debt free fast!

Poo

Oh, I never thought of it like that, Poosmate. That makes sense (in the eyes of the debt people!) Sorry if I have mis-advised, Cloudy!

asp746

i think it's in your best interests to decrease the credit limit - i'd rather have a lower credit limit than have a large sum of money you're going to ever use anyway and it resists temptation that you may not have now but could possibly have in the future.

IWantToBeFree_2

There is a fine line to be achieved between being too close to your credit limits and having too much credit available - both could result in rejections if you try and get any other 0% deals.

I would personally leave it for a few months, and then reasses the situation as you make payments on the new card - plus, I have also found that Barclaycard do good existing customer deals, so having a reasonable limit on a Barclaycard could come in handy in the future.

johncarlton

Reducing your credit card limit has zero affect on your credit file.

Therefore even if you wanted to take out another 0% credit card at a later date you will still be subject to a credit search and as such if your credit rating is fine you will still get a high level of credit.

You are in a good possition to not need such a high credit limit - if you can reduce the limit - DO IT ASAP before the temptation to use it gets the better of you.

Cloudy456

Thanks for all the replies, there are some really good points raised. I think I will leave it a month or two and get settled into my new payment routine with the way the payments will be now, and then reasess.

biological

I had a limit of £5k on my B'card & asked for it to be reduced to £2k about 6 months ago because I wasn't using it. When I asked to up my limit to £2.5k online a couple of days ago I got an instant yes.
Not necessarily a good thing though..