Credit limits

morg_monster

We are planning to apply for a 0% purchases card to buy a car for £4000-£5000; we are going to pay half off in a lump straightaway (or within a couple of months - waiting for my grandma's estate to be finalised) and then pay the rest off over a year.

The problem is we need a £5000 limit to do this; is there any way to find out the likely limit we'd get before applying? or any websites that give likely limits for particular cards? If we apply and get a £2000 limit, then that kind of ruins our plan!
We're thinking of the tesco or sainsbury's 0% for 12m card.

FYI we both have excellent credit ratings, most recent credit applications a mortgage last December and new contract phones in Jan/March. My DH will apply for the card, he has a salary of just under £50k. I'm a student with only £4000 taxable income a year.

stephane_2

No credit card providers will tell you what credit limit you're likely to get, all depends on current level of debt, income...etc
If it is your first credit card, then very unlikely that they'll give you a limit near enough the £5000.
MBNA is said to be generous with credit limit and they allow you to transfer fund to your current account at promotional rate with a 4% fee as Sainsburys credit card will not...and you need to make sure that the car dealer will accept credit card payment

morg_monster

It's not our first credit card, we've both had cards for years, we just want to get a new one with 0% on purchases for 12m. We do definitely need one with a 0% purchase level.
Thanks for the info about MBNA, looking at their website it looks like their only card with 12m 0% on purchases currently is an Amex so will have to do some research and find out if any car dealers near us takes Amex.

stephane_2

No, if you do decide to apply for a mbna credit card then you need to look for 0% deal on balance transfer as I said with mbna you are allowed to transfer fund up to 95% of your credit limit directly into your bank account, you'll benefit of the 0% on balance transfer during the promotional period. You'll just be charged a fee of 4% but you'll probably get the 0% offer for at least 15 or 16 months

chexum

Car dealers always add 1-3% to the price if they can be talked into accepting a card. With Amex you have even less chance of them accepting it, or an even higher percentage though

In my (arguably, quite limited, but fresh) experience, card issuers tend to match (and up a bit) the credit limits based on your recent (roughly a year) history with other cards. That is, assuming your (his) available credit is much below half the annual salary, and the used credit (carried balances) is not significant compared to the total available limit.

If he had a card recently with a limit of around of £3k, for at least 1-2 years, and the credit history is otherwise indeed spotless, you have high chances for £5k with most mainstream lenders.

And no, you can't learn the credit limit before at least leaving the search footprint on the file. Most lenders will only tell you the limit after you committed to the card(*), but you can usually have 1-2 more attempts with other lenders before your chances really get worse - if you haven't done any card application in the last 6 months, again.

* - Sygma, for example can start reporting account conduct, including credit limits even before you get the card, so even cancelling early leaves more traces of the credit...

bobkerry

credit limits basically depends on the banks rules and regulations..they are decided first and then the procedure moves on....so try to first make sure that you have read every single ifnormation in order to be on the safe side

morg_monster

Thanks. I hadn't realised about the car dealers adding a % for cc's.
The MBNA card with 4% isn't that attractive really due to that 4% charge although I see how you can use it with the balance transfer.

We do have enough in savings probably to pay fully in cash, but that would nearly empty our savings so hoped to avoid interest with a CC. Looks like we may have to weigh the situation up again as seems like there's no way to truly get 0%.

Thanks all!