Re reducing credit limits

second_chance

Hi all I was just wondering is it a good idea to reduce available credit limits as I repay my debts? at the moment every time I repay say £50 off something I reduce my limit by that amount in the hope then it will decrease my ability to spend, just thought id ask in case for some reason I shouldnt be doing this!! Thanks

Tixy

Are you likely to be planning on applying for any more credit?
If you are then by keeping reducing the limits it will keep looking like you owe a high percentage of your available credit which can go against you with some lenders.

Also if its a card you are clearing first then sometimes once that debt is cleared the card provider will offer you a good BT deal that you might want to move a more expensive debt onto - you wouldn't be able to if you reduce the limits too much.

Aside from those possible reasons I would say there is no reasion not to carry on as you are. And if you think you might otherwise re-spend on your accounts then it might be a good idea to do it even if either of the above do apply.

dancingfairy

personally I think it's a good idea - however I know some banks insist on credit checking you for the new lower overdraft amount each time you try to change it which is crazy. So if you had a 500 overdraft and you wanted to reduce it to 450 they would then credit check you to see if they wanted to give you 450 overdraft. Obviously this could impact on your credit rating if you are getting credit checked willy-nilly but as long as you are not being credit checked to do this then I would continue trying to reduce your overdraft limit.
df

second_chance

Thankyou...wasnt sure if I was doing the right thing and how it would look on my credit report....think il carry on then as the spending urge may get the better of me!x

CH27

second_chance wrote: »

Thankyou...wasnt sure if I was doing the right thing and how it would look on my credit report....think il carry on then as the spending urge may get the better of me!x

Cut the cards up. That way you can't spend on them.