Question about credit card limit

sweetdaisy

I have been successful in my application for a Cashback credit card with Capital One. I received the PIN two days ago so contacted to find out when my card will arrive.

I also asked what my credit limit was and they said £10,000. I spend £10,000 + a year using a credit card and pay the balance in full every month, so have never paid interest.

However, the cashback on this card is tiered:
£0- £5,999 is at 0.5% cashback
£6,000 -£9,999 is at 1% cashback
£10,000 + is at 1.25% cashback (until anniversary of card being activated, then goes back to 0.5% and so on).

So, as my credit limit is £10,000 does this mean that I'll never be able to earn 1.25% cashback on purchases as it's going over my limit?

My credit limit with my current credit card (a loyalty one) is £2,700 a month and I just pay off balance in full as usual, but imagine that with my new card my limit it £10,000 a year?

So, what happens if I spend over this amount?

CLAPTON

No the limit is the maximum you can owe at any one time

so if you spend 2,700 in the first month and pay in full, you can spend another 2,700 the next month etc so in the year you can spend 2,700
etc
so in a year you have spent 2,700 x 12 = 32,400 per year

just make sure you never exceed the 10,000 at any one time

lolarentt

Your limit is the maximum you are allowed to owe on the card at any one time - so if you pay off the card monthly as you say you will, you'll still have £10,000 to spend....and so on. If you have £500 outstanding on the card you will have £9500 left to reach your limit, this will go back to £10,000 once you pay the £500.

So of course you do not have a problem!

sweetdaisy

Thanks. I just had a moment where I got all confused .