Dilema - fewer cards/higher limits or more cards/lower limits for future applications

The_Boss

Hi all,

I currently have 5 credit cards with varying limits as below:

Barclaycard : £4k*
Santander : £2k*
MBNA : £8k
Capital One : £3k (my last card, opened in October)
Halifax : £1200
(Salary is £28k)
*limits previously reduced by myself from £5k and £4.5k accordingly. I have had these 2 cards for many years, the MBNA for 2 years, Halifax for 13 months.

MBNA has 4k on it at a promotional rate, others just for monthly spending and are paid off.

I'd like to apply for a cashback card and balance transfer card in future months but feel it best to do some account maintenance first to ensure the best deal and limits. I ideally wish to keep my current cards for various reasons so am minded to reduce the larger ones limits.

However responsibly managing a high credit limit is also a good sign of financial responsibility and having many cards with lower rates could make lenders concerned about giving me higher amounts in future. So which is best : same number of cards with lower limits or close one or two and keep a few with the higher limits?

cos_2

I'm guessing there are no responses because none of us works in the credit industry and feels they can tell you an answer!

Because CC co's hide their acceptance criteria it's very hard to know what to do. I've read that some folk have upwards of 10 CCs; others struggle to get one. And then there's the CC limit to consider.

So, sorry, all I can do is guess, based upon my 50-odd years on the planet

I think 5 cards is a tad on the high side. If you want more, you must reduce. So, I'd get shot of three cards - those with your lowest limits to start with, and also Cap 1.

There are loads of BT and cashback deals at the moment, but, of course, your existing cards won't drop off the CRA radar for anything up to 2 or 3 months.

Just my personal thoughts and not based on any insight of the industry!

malcolmffc

I similarly have a large number of credit cards I use for various things:

Amex Platinum (currently on 5% cashback deal), limit £6900
Post Office Platinum (overseas spending), limit £2500
MBNA Amex Cashback (1.5% cashback on groceries which will beat Amex when the 5% expires), limit £3500
MBNA Visa Cashback (0.5% cashback, backup when retailer won't take Amex), limit £2000
Tesco credit card (Using 0% deal to pay for Rail season ticket, limit £3500)

Salary £35k.

I'm currently considering applying for the Aqua cashback card to complete my collection for 3% cashback abroad. But I might need to cut my limit on the Amex first.

InsideInsurance

The problem is that there is no single "rule" and each lender has its own preferences.

In general having a couple of high limited cards is better than having the same limit but spread over a much larger number of cards. Given the OP wants to reduce the overall limit anyway then this is normally best achieved by closing the lower limited cards rather than dropping the top end cards limits.

Where it is more complicated is in the generic keep or close question (this is easier due to the desire to reduce available credit anyway)

The_Boss

InsideInsurance wrote: »

The problem is that there is no single "rule" and each lender has its own preferences.

In general having a couple of high limited cards is better than having the same limit but spread over a much larger number of cards. Given the OP wants to reduce the overall limit anyway then this is normally best achieved by closing the lower limited cards rather than dropping the top end cards limits.

Where it is more complicated is in the generic keep or close question (this is easier due to the desire to reduce available credit anyway)

Yeah - would usually have been best to cancel the lowest but the Halifax card pays £5 cashback each month if I spend over £300 so we use this for joint purchases such as household groceries/goods and meals out. Far too soon to cancel the Capital One card, I use Barclaycard for personal spending, MBNA has the balance on it so the Santander one is the only I would definitely cancel and possibly the Barclaycard. But I have had these accounts longest, so again dilema about stability

This has all been triggered as since I received the Capital One card in October, I was refused a credit raise by Halifax even though all my accounts are well maintained and always have been. So although this is only one lenders criteria it may reflect a general trend.

Tixy

Was there a particular reason you applied for the cap1 card? If not then I would probably consider closing that one down.

And then in a couple of months applying for a cashback card.

You mention wanting a BT card in future months - you may well find that either MBNA or Barclaycard will offer you a BT deal as an existing customer (assuming the available credit is high enough for the transfer you want to do).

The_Boss

Tixy wrote: »

Was there a particular reason you applied for the cap1 card? If not then I would probably consider closing that one down.

And then in a couple of months applying for a cashback card.

You mention wanting a BT card in future months - you may well find that either MBNA or Barclaycard will offer you a BT deal as an existing customer (assuming the available credit is high enough for the transfer you want to do).

The Capital One card was for the 5% cashback offer in first 3 months and do not need it now as the cashback has reverted to 0.5% plus the statement window is the shortest of all my cards. However as stated this is my newest card so I do not wish to cancel it (for stability reasons).

The BT card I need is to balance transfer from my MBNA card so MBNA offers are not currently suitable. Barclaycard offered 0% for 12 months with a 3.5% fee but I'd like to apply for the Natwest card with a 1% fee of still available in mid/late March.

zerog

This is what I would do, based on personal whims:

Close Santander unless it's a Zero, in which case close Barclaycard - you can keep one with a long history - or swap the Barclaycard to one with better benefits
Close MBNA once it's paid off. Has the cap one cashback been paid? If yes then close it.
Keep halifax since you only want to spend 300 a month on it anyway. Why did you want to increase the Halifax limit? Just spend on the barclaycard.

Tixy

I don't think cancelling a card after only having it a few months is likely to be seen as a negative - especially not when several of your other cards have been held for a long period of time.

JakeGreen

To be approved for high limit cards in the future, the card issuers want to see evidence that you can handle a fairly high limit card without going off the rails. The size of your highest credit limit is therefore important. At 8K you're looking good to make a step up to 12K and so on....

The thing which fascinates me about credit cards is how we're all trying to second guess the criteria each company uses to dish out its credit!