What to do for best?

lisaloo1977

Quick basics. I have current account with Halifax, pay the fee get £300 overdraft free have total of £2300 available to me, the £2000 at the daily charge. I very rarely go into the £300, so am thinking I would be better lowering my overdraft limit, would this be good or bad thing?
Have also got next account, some how have ended up with £2000 limit. If I use the account I pay in full at end of month, so again silly limit I don't need, should I, can I reduce this?
I also have Halifax one credit card limit of £5850 on 0% over 12 months, I'm 6 months in and have 2k available on it which I am chipping down weekly.

I just feel like the overdraft and next account are taking up available credit I may want in the future with no real benefit to me now. I don't want to do anything to affect my credit history in a bad way and I'm happy to plod on not using them, but seems pointless?

In an ideal world at some point in the future I would like to apply for another 0% card and I guess I'm trying to get things in order to make that possible.

Any advice appreciated.

innovate

I am not very familiar these days with overdrafts since I haven't used one in the last 15-20 years, but do you really need to pay to get an overdraft? I have a First Direct current which seems to come with an automatic £250 overdraft, and a Santander 123 with £950 overdraft. Both of them were just given to me, I didn't ask for them and I am not using them. The FD is free, the Santander 123 costs £2/month but I get at least £10 cashback a month so it is effectively free.

I find it useful to have big limits on several credit cards, as long as I can pay them off each month. The way to get your CC limits increased seems to be to use the card regularly, and pay it off regularly. I'd get rid of / avoid store credit cards and accounts - - they limit you to just purchase with them, and I am not sure they have a positive effect on your credit record.

Got to go, my wireless keyboard's out of batteries....might be back if I have further ideas.

pinkdalek

If you were to lower/get rid of your Next card then you are not guaranteed to get a similar limit should you apply in the future, however they may offer incentives if you were to apply as a new customer. If your credit rating is good then you know you would have no issues in being accepted.

Lowering your overdraft would also give you more available credit too, perhaps just lower it to £1000 or £500, ask yourself what you use the overdraft for. Really it should only be used for short term e.g. need to pay something quickly and your pay day is not due for a few days.

Having such a larger credit card limit, do you really need a £2000 overdraft?

lisaloo1977

That's the point, I never use the overdraft. They gave it to me when I was building my history up after a period abroad, but bar a few times in the last 19 months I have always had a positive balance with the account. I have dipped into the free £300 part a few times on holiday, but next wage paid in took me straight back into positive.
I am not fussed about a 2k limit on the next account, it started at £200 and it seems every time I log in its gone up, currently standing at 2k which I would never spend, I'd happily lower it.
The credit card I made a big purchase on and am paying off on average £600 a month from it, I added a £450 to it today that's not showing yet so balance available is actually more. I'm confident of clearing it before the 0% ends.
I don't need the credit, this was all done as a building history thing over years and now i find myself here. I am aware my main lending is with my bank and that might make them more happy to lend. If I apply in the future I may be refused by others, I'm not sure?
The 0% credit is useful, but do people have more than one of those cards on the go, am I better just reducing the unused overdraft size and the unused next funds, paying off the credit card and building up a balance in my current account and looking again in say 4 months when my 0% deal will have a few months left?
Part of me is happy where I'm at and the silly part of me is intrigued to know if someone else would lend at 0%.

Thanks again for the replies.

backinbusiness

Interested in the answer here too.

Would lowering the overdraft impact on your credit score? Do they credit score for a smaller o/d. Is it a new o/d?

Curious myself. I have an o/d of £5K with HBOS. Never, EVER use it.

Just there as a badge to myself of how far I've come in rebuilding my internal/external behaviour score. (Sad, I know )

BiB

innovate

It largely depends on your circumstances - - if you want to make a larger purchase which you'd like to pay off over several months, a 0% card will be massively useful. I prefer credit cards that pay cashback over 0% interest cards because I don't plan on any large purchases, and I have a huge aversion to debts.

Back in the times when you could do 0% balance transfers with no charge, I did a bit of stoozing. It's probably still possible nowadays to make money from it but I found it too tedious for my taste when they started charging.

Nowadays, cashback credit cards win hands-down for me. From what you say about your situation, lisaloo1977, you might find this would work better for you, too. Also find out about cashback on the Santander 123 account, interest on that account and on Lloyds Vantage, and the Halifax £5/mth, all of which have been discussed on the forum. If I were you, I'd stop paying for an overdraft facility that you don't really need, anyway. Turn the tables - - get the banks to pay you, rather than you paying the banks.

innovate

I don't know whether the size of an overdraft facility does anything to your credit score. For years, I just had the £250 FD overdraft, which I never asked for and never used, and my credit score has always been tops. I reckon the really important thing is that you never default on any debt - the size of the debt seems not very relevant (I had a huge mortgage).

There's an article on the main site on how credit rating works
- perhaps that will answer some your Qs.