Reducing Next store account credit limit

katieb168

Hi everyone,

Not sure if I've posted this in the right place or not, but hope so!

I'm just wondering about my Next account - currently there is roughly £260 owing which I am paying down nicely by making more than the minimum repayment each month. However the credit limit is unbelievably high - something like £3500. I'm never going to be spending anywhere near that much and I'm concerned the high amount of available credit will have a negative impact on credit rating or credit worthiness if I was to apply for any credit in future. I know a lot of factors can affect this but just wondered if I could do something about this Next credit and if so whether it is likely to be of any benefit. My only concern is that I'm sure Ive read (probably on here somewhere) that once you ask to reduce the limit they reduce it by a huge amount, sometimes making you over the allowed limit which I obviously don't want to do.

Does anybody have any ideas or experience of this?

Any help or advice would be much appreciated

StuC75

Something to consider though re any companies that would subsequently check your file would see:

1 - Higher Credit Utilised - present using >7% of available credit; reducing Credit limit would increase this % making you appear closer to 'maxed out' -- a possible detrimental factor..

2 - credit limits can be reduced for 'bad risks'; anyone searching the file wouldnt know for what reason and credit limit had been reduced... as CRA such as Credit Expert show a credit limit history - they may not know why the reduction happened..

so the true answer is difficult to determine - as a high credit availability could be seen as a temptation....

ahxcjb

*Never* pay just the minimum required. This wil harm your credit record, as it shows you're only able to pay the bare minimum each month. A specific marker recording the fact you made a minimum payment is recorded with CRAs. So, stop doing that and start paying more; even if it's only £1 extra. It still removes that marker.

And, yes, given your limited income (demonstrated by only being able to pay minimum balance required), you should definitely decrease your credit limit. Lenders consider your income against existing credit available when scoring you. Your income dictate you should reduce your Next card's limit.

UPDATE: I mis-read the original post re making minimum payments.

The_MoneySavingKid

ahxcjb wrote: »

*never* pay just the minimum required. This wil harm your credit record, as it shows you're only able to pay the bare minimum each month. A specific marker recording the fact you made a minimum payment is recorded with cras. So, stop doing that and start paying more; even if it's only £1 extra. It still removes that marker.

...... Mts

katieb168 wrote: »

hi everyone,

not sure if i've posted this in the right place or not, but hope so!

I'm just wondering about my next account - currently there is roughly £260 owing which i am paying down nicely by making more than the minimum repayment each month. ....

ahxcjb

The_MoneySavingKid wrote: »

...... Mts

Apologies! Read this on my iPhone.

katieb168

Hi all,

Thank you for your comments.

Yes I do always pay more than the minimum and on top of this I also put extra towards it whenever I have spare cash (e.g. extra money from work). Fortunately my income is good at the moment so I can pay extra off this and save a nice amount each month with no trouble. I hope to have this Next account paid off completely in a few months so not long to go Was just concerned about the high credit limit I'll never want to use.

I suppose the best thing to do is wait until I have paid it off in full then cancel the account?

ahxcjb

If you're seeing no benefit from using the account (ie, you don't shop there regularly and won't benefit from the 'rewards' the card offers), and you have other credit facilities being recorded to your credit file (ie, credit card, mobile phone, TV / Phone subscription), then yes, I would cancel (or definitely reduce) it.