Should I reduce credit card limit or just close it?

ohit

One of the credit cards recently wrote to me with a credit limit increase of nearly 40%!
That card now has a credit limit greater than my annual minimum living costs!!

ohit

blacksta wrote: »

30K limit - Some people just love credit.

Absolutely - used well, it can return benefits.
All my business/work expenses goes on credit cards. They get paid back to me through expenses before the statement payments are due, and I then also get to keep the cashbacks.

pheonixrising21

Do you have any outstanding balances on them or do you pay off in full each month? What is the most you ever spend in one month on them?

If you have no balances, I would reduce to to just above your maximum spend on each. Then you keep all the benefits and still have all the cards for their specific purposes. Plus you reduce your available credit, which will enable you access to other types of lending in furture should you require it, e.g mortgage, car loan, personal loan.

Thats my opinion anyway...

ohit

Thanks for your reply.

I pay off in full every month.

What if I leave the credit limits and close the cards a few months before I intend to apply for a mortgage - Does that look better (i.e. previous evidence of ability to handle 'large' amounts of credit) ??

CLAPTON

ohit wrote: »

Thanks for your reply.

I pay off in full every month.

What if I leave the credit limits and close the cards a few months before I intend to apply for a mortgage - Does that look better (i.e. previous evidence of ability to handle 'large' amounts of credit) ??

I don't think there is any evidence that mortgage companies take into a/c how many CCs you have or their credit limits: they would certainly take into a/c the balances however.


I've had 6 or more cards for years with silly (high) credit limits and have never been turned down for a new card.
I do buy virtually everything on a CC and pay in full every month.
They mostly serve some specific function (two cashback, two OK overseas, a couple for specific shops)
They are all used regularly so stop them being closed for non use (in the past several cards were closed by the companies for that reason)
Occasionally I close one if the benefits have been withdrawn but otherwise i see no problems with the number of cards.

camuk81

Clapton they may do as it would affect your ability to borrow. These are pure examples so please bear with me.

If you ran up over 30k debt in one night (that would be a good party) and say your mortgage was £1,000, your minimum would be nearly as much as the mortgage. It may well affect the amount you can borrow or least be a condition if say you bank with barclays to close the barclays card down. This way they are more responsible.

Would it be so horrible to reduce to say them to £2,500 dependent on your circumstances