Substantial increase in credit limit - should I decrease?

marmite9

Hi,

I have a Lloyds Platimum credit card and have just paid off a large amount of my outstanding balance. They have now informed me that they've increased my credit limit by 200%(!!) however I'm trying to improve my credit rating, and apply for another 0% balance card to pay the rest off.

Should I decrease my credit limit on my Lloyds cards as much as possible so as not to have too much 'available credit' on my exsiting card?

If so, how long does it take for this decrease to show on my credit records?

Many thanks!

fozmcfc

The main disadvantage to having a large limit on a credit card, is if it means you have a lot of credit available (whether used or not) against your annual income.

You will need to post up at least some basic details, such as your annual income and current credit available, used or not, that would give members a chance to give you some idea of how to proceed.

For instance in my case I earn roughly £32,000 a year, but I have about £17,000 in credit card limits available to me (£0 owed on all of them though), plus the £4,400 loan in my signature.

So basically I have £17,000 credit available to me and although I only use/owe £4,400, creditors will look and think I could in effect be in debt to £21,000 + if I spent on the cards, so I might struggle to get another card.

Now say I closed down, reduce my limits, so I have £5,000 in credit available + the £4,400 owed, then creditors would be more likely to accept me.

Percy1983

You say its a 200% but what is the new figure?

As it is I have a card at £11800 and it might show to others I am a good customer as they don't generally give artes like that away when my income is 18.5k, with that all my available credit is more than a years salary and that includes of 5ks worth of cards I have recently applied for and received. There is the other element of percentage of debt used, in my case it is very low due to high limits and low balances, if I reduced them right down I would be at say 90% usage which will look much worse.

Its basically a balancing act and different lenders will look at it differently so there isn't strictly a correct answer.