Credit card limits

Chrisandsarahs

Hi all. I've been using this site for over a year and have found it really helpful in guiding my money management so thanks to everyone who takes the time to help others and offer invaluable advice.

I currently have 3 credit cards. 2 have a total balance off around £3000 on 0% deals, and the third is empty. The empty card has a limit of £14,600. I'm not planning on using this card, so should I close the account? Does having a high available credit limit effect my chances of future credit?

[Deleted User]

Yes it does. But it's only an issue if you are thinking of getting more credit.

Is it a decent card (ie potential future offers)? Is there a dormancy fee?

Chrisandsarahs

Deleted_User wrote: »

Yes it does. But it's only an issue if you are thinking of getting more credit.

Is it a decent card (ie potential future offers)? Is there a dormancy fee?

Hi thanks for the quick reply.

It's a sainsburys card. They've never offered me anything like bt deals. I have a very good credit rating and have never missed any payments on anything, and have never be declined for credit in the past, so I'm thinking if I needed another card I just apply for a new one.
We want to move house and will need to increase our mortgage so I'd like everything in order before we apply.

The_Boss

Chrisandsarahs wrote: »

I have a very good credit rating.

How do you know that?

Chrisandsarahs

The_Boss wrote: »

How do you know that?

Ive checked my rating at 3 different companies and its either been at the top, or near the top. I know most people say its worthless, and they maybe right, but I like to use it as a guide. I've also never been refused for any sort of credit anywhere.
So I'm presuming I have a very good rating?

The_Boss

Chrisandsarahs wrote: »

Ive checked my rating at 3 different companies and its either been at the top, or near the top. I know most people say its worthless, and they maybe right, but I like to use it as a guide. I've also never been refused for any sort of credit anywhere.
So I'm presuming I have a very good rating?

You said it yourself - those scores are worthless as they do not take application data into account (e.g. salary, length of time with employer etc etc).

Sounds like you have a good credit profile but each lender has their own criteria in determining whether someone has a good rating so that is something that nobody but the lender can determine.


What are the exact balances and credit limits of the two cards being used? Also how long have you had the empty card?

Chrisandsarahs

The_Boss wrote: »

You said it yourself - those scores are worthless as they do not take application data into account (e.g. salary, length of time with employer etc etc).

Sounds like you have a good credit profile but each lender has their own criteria in determining whether someone has a good rating so that is something that nobody but the lender can determine.

What are the exact balances and credit limits of the two cards being used?

I totally agree. I'm not overly concerned about my rating. I was more worried that having an open line of credit of £14,600 in the form of a credit card may have a negative impact on any future applications for credit.
Part of me says keep it open for emergencies as I have little savings, but another says close it as I've not used it for over 8 months. I like to think I'm sensible with money. I only spend what I can afford, unless its something that we really need (Not want), then I either get a loan, or find a 0% deal.

The_Boss

Chrisandsarahs wrote: »

I totally agree. I'm not overly concerned about my rating. I was more worried that having an open line of credit of £14,600 in the form of a credit card may have a negative impact on any future applications for credit.
Part of me says keep it open for emergencies as I have little savings, but another says close it as I've not used it for over 8 months. I like to think I'm sensible with money. I only spend what I can afford, unless its something that we really need (Not want), then I either get a loan, or find a 0% deal.

What are the balances and credit limits of the two cards you are using and how long have you had the empty one?

I closed cards/reduced limits several years ago and it totally affected my ability to get credit. So I am always cautious before advising to close accounts or reduce limits.

Chrisandsarahs

The_Boss wrote: »

What are the balances and credit limits of the two cards you are using and how long have you had the empty one?

I closed cards/reduced limits several years ago and it totally affected my ability to get credit. So I am always cautious before advising to close accounts or reduce limits.

So it might have a negative impact if I close it. That's interesting. Cc1 has a £3,100 limit and a balance of £1,600. Cc2 has a £2,000 limit and a balance of £1,400.
I've not used the sainsburys card for over 8 months.

jonesMUFCforever

I would ask them to reduce the limit to something like say £5k.
At the same time it would do no harm in asking if they have any offers for you.

The_Boss

Chrisandsarahs wrote: »

So it might have a negative impact if I close it. That's interesting. Cc1 has a £3,100 limit and a balance of £1,600. Cc2 has a £2,000 limit and a balance of £1,400.
I've not used the sainsburys card for over 8 months.

How long have you had the Sainsburys card?

How long will it take you to repay the two with balances?

My initial thought would be to reduce the Sainsburys card limit down to £5k but not close it. Having a third card is better for your credit profile than 2. It means your profile has more account history data on it. You should ideally use it once a month and repay in full though.