Have I Got Too Much Credit?

MentalMinnie

I'm wanting some advice please?

I'm looking to buy myself a new car next summer. This will be on 0% finance (hopefully). We're currently paying off CC's and loans, hence why i'm waiting til next year. We've paid off £3k this month, so it's going well.

Anyway, I have the following:

Barclaycard with £3,000 limit
BOS CC with £3,000 limit
Nationwide CC with £4,000 limit.
Very account with £1,500 limit
Next account with £600 limit

Also paying off the last of a personal loan, due to finish in April

Now, going under the assumption that all these cards have Zero balance, and the loan is paid off, do I have too many credit accounts/cards to be able to obtain finance on a car?

I'm planning to close the BOS card once the balance is cleared as I only got it for a BT. I'm wanting to get the Sainsburys Nectar CC for the points when we do our shopping.

Many thanks!

MentalMinnie

Anyone? Please?

chalkie99

I think it's too early to tell with the world financial situation such as it is. An awful lot can, and probably will happen by then.

Only today ING who supply 40% of the market for small business vehicle finance have pulled out of the UK, some mortgage lenders have drastically changed their lending rules and noone knows what may be about to follow.

Another point, there is really no such thing as 0% finance - you are paying in the purchase price. It may be better to concentrate on getting a personal loan and bargaining hard on a discount purchase price. It is a buyers market.

tonyh66

I suppose it depends on your income, its based on a percentage. You have potentially £12K credit on those cards, if you earn £12K then lenders will run or charge extortionate interest rates, if you earn £100K you don't have too much credit.

MentalMinnie

I earn £17,000 pa.

I'm definitely getting rid of the BOS card once cleared, but I really want to keep the other 2 as they are 7.9% & 9.9% APR.

On a personal loan i've been offered 6.9% with Nationwide, based on their softsearch facility in branch.

SeanG79

As mentioned before, there is no such thing as 0% finance, the dealer reimburses the bank the interest portion after the sale, so you might as well negotiate the price of the vehicle down and then obtain the best rate of finance you can.

Personal loans are more difficult to acquire than vehicle finance as with vehicle finance they have the security of the vehicle. Unsecured credit generally banks don't like to see more than 50% of your annual income.

With the credit you mention cleared and the balances of the credit cards assumed at £0 then there is no reason you would not qualify for vehicle finance, provided your credit searches show no adverse information.

Apples2

Why don't you cut up the Very and Next account cards?
Store cards are traditionally awful things, if you have a clear balance, throw it away, you already have access to more than enough credit.

VERY
Representative Example
Our Representative APR and interest rate is 39.7% variable

NEXT
There is a maximum monthly service charge of 1.980% variable (APR 25.99%) added to your account when a balance is carried forward to the next month.

bargainbetty

Just a thought, but are you considering a 'new' car or a new to you car? I only ask because the brand new vehicles depreciate by a couple of grand the moment you drive off the forecourt, so it's really not a great investment.

Why not spend the time researching the vehicle that would most suit your needs, and finding a reseller of 2-3 year old vehicles. Run-in, all the teething troubles ironed out, and most of the recalls covered - much wiser way to spend your pennies!

Definitely close off the Very and Next accounts - silly levels of interest on those. If you want to get a Sainsbury's card, then close off the next highest interest card too. You may be classed as having too much available credit by banks for a personal loan. Car finance from showrooms tends to be secured on the vehicle, so they aren't as worried.

MentalMinnie

I'm keeping the Very account, purely because i havent' paid interest on anything yet, and everything i've ordered has been cheaper. Plus i regularly get £10 and £20 codes so its worthwhile. The next account im not so bothered about. Again, don't pay interest on it but i opened the accoun by mistake online. Thought i was going through a normal checkout procedure but was actually an account process. I have a terrible habit of not reading things online before i tick confirm.

I'm looking at getting an ex-display model, so a few months old. I just haven't decided what yet!