Credit Limits

billchecker1

Hi, just after some advice please:

I have a number of credit cards, around 6 with 2 with balances (used for 0% promos).

The others are used for their rewards, mainly amex.

I pretty much open and close accounts down when they are of no use to me, the only one that I have kept is my barclaycard which I have had for ten years since I was a student. It currently has a balance as they offered me 6 months at 0%.

My question is that many of my cards offer me increases in my credit, including barclay card. Is it worthwhile to accept these or am I best to keep them low? After all I plan to close most of them down within a year or so (apart from barclaycard and egg). Is it good for other issuers to see high credit limits or lower ones?

Thanks for your advice.

PS I should add that I wouldnt actually be looking at using more of the credit. I am more interested to see if having higher credit means that lenders would think you are a better customer.

lisyloo

There are two contradictory answers I'm afraid.

If you want a high limit in future then it's best to keep the high limits as proof that you can manage them.
However having too much available credit can stop you getting more credit.

Personally I'd keep the limits high but make sure the cards get closed when you are no longer using them.

billchecker1

Thanks for that (I think!). So if I keep a few at the high end (the ones which I want to keep) and the ones which I will close at the lower end.

Its all so confusing!

lisyloo

You are trying to second guess how every lender in the UK will interpret your credit report and that's impossible which is why you are going to have difficulty getting any straight answers.
Sorry but that's the truth.

I personally close unused cards down because

1) They stop you getting new customer deals
2) They are a fraud risk (and you might not notice on unused cards).
3) They are a theft risk and again if the cards are in a drawer you might not notice if they go missing.
4) You could incur dormancy fees
5) Too much availabel credit stops you getting more.

On the other side of the coin

1) Its desireable to have some lines of credit available to you
2) It's defintely desireable to have some credit history

How many you have and the limits, depends on your personal circumstances and how you personally weight those factors.
I personally close them down when I don't need them, but I don't have a great need for credit - so it is down to your personal circumstances.

billchecker1

Thanks Lizyloo,

Its not really a question about keeping cards open, more if I should increase limits on ones which I know I will keep open. These are the ones I have:

Egg - Keep for 1% cashback
Halifax Clarity - for the overseas exchange
Tesco - For the points (although they now seem less and less)
Always repay so no interest fees.

I also have two balance transfer cards both at 0%:
Barclay card - I have had this for 10+ years
Priority Club Visa - Used for the intro points now just have a small amount left after balance transfer. Aim to close before 0% period ends.

I then have one amex which I keep purely for the one off BA miles offer. I will close this down in July.

So my question is for the Egg, Halifax, Tesco and Barclaycard. Is it worth seeking higher limits? Most are offering me it. Even though I have no interntion of using them, is it worthwhile to look good to other lenders?

I know I am trying to second guess lenders but from my laymans point of view a person who has a handfull of cards for a long period of time with high limits would be a good risk.

Thoughts?