Credit card limits

Chrisandsarahs

I think I will reduce it rather than cancel it. I'll give them a call now.
I pay £400 a month in total off the other 2 cards. If I know I will need some extra money for things like mot/car tax, I pay a bit less off. Both will be paid off well before the 0% runs out.
Thanks for all the advice.

The_Boss

jonesMUFCforever wrote: »

I would ask them to reduce the limit to something like say £5k

Great minds, eh

SCO

adindas wrote: »

Apart from convenience shops most shops will accept credit card payment for spending of over £5.00

The likes of tesco etc will accept cards for any amount, even a paper at 40p.

[Deleted User]

I recently decided to ditch all credit cards that didn't offer me something in return for using them. That Sainsbury's card has a pretty high limit and if you're not going to use it then I'd either ditch it or reduce it by quite a bit. Alternatively you could replace it with a card that gives cash back/avios/clubcard points or whatever floats your boat.

YorkshireBoy

Chrisandsarahs wrote: »

I pay £400 a month in total off the other 2 cards.

Why? That's 13% of the debt each month...probably at least 10 percentage points more than you need to.

Both will be paid off well before the 0% runs out.

Again, why? Wouldn't it be better to keep all but, for example, the 1% minimum payment in a savings account and make a little money along the way, before clearing the balance at the end of the intro deal?

Does having a high available credit limit effect my chances of future credit?

Yes, although by how much will depend on your income and other financial circumstances...both of which you haven't divulged.

Lenders use, amongst other things in their assessment, 3 ratios:

(1) Used to available credit
(2) Used credit to income
(3) Available credit to income

So at the moment all we know is (1)...and that's 15%. That's comfortably low, but will your income support future applications if, with a £25K salary, (3) is 79%? I would think not.

I have a near £25K limit on my MBNA card, and the only reason I keep that card is that they regularly give me money transfer deals at 0% for 12-13 months...with a very low 2% fee. All my other (0% on purchases) cards are £6-8K, ie what I might reasonably spend in the 12-16 months intro period. Anything more is a waste to me, because if it doesn't affect the acceptance of a product it'll certainly affect any credit limit granted.

We want to move house and will need to increase our mortgage so I'd like everything in order before we apply.

In my experience, mortgage lenders are only interested in used credit, ie debt...not available credit, ie potential debt.

Chrisandsarahs

YorkshireBoy wrote: »

Why? That's 13% of the debt each month...probably at least 10 percentage points more than you need to.Again, why? Wouldn't it be better to keep all but, for example, the 1% minimum payment in a savings account and make a little money along the way, before clearing the balance at the end of the intro deal?Yes, although by how much will depend on your income and other financial circumstances...both of which you haven't divulged.

Lenders use, amongst other things in their assessment, 3 ratios:

(1) Used to available credit
(2) Used credit to income
(3) Available credit to income

So at the moment all we know is (1)...and that's 15%. That's comfortably low, but will your income support future applications if, with a £25K salary, (3) is 79%? I would think not.

I have a near £25K limit on my MBNA card, and the only reason I keep that card is that they regularly give me money transfer deals at 0% for 12-13 months...with a very low 2% fee. All my other (0% on purchases) cards are £6-8K, ie what I might reasonably spend in the 12-16 months intro period. Anything more is a waste to me, because if it doesn't affect the acceptance of a product it'll certainly affect any credit limit granted.In my experience, mortgage lenders are only interested in used credit, ie debt...not available credit, ie potential debt.

Hi. Thanks for all the info.

I understand what you're saying about paying the min every month on the cards and save the rest to gain a bit of interest on the money. But I am a person who likes to pay off anything I owe ASAP. I've spent the money, so I want to pay it back. It's just the way I am.

The credit that I have available on the 3 cards is more than half of my annual salary, but what I'm actually using is around 10% of my salary.

I've been looking at the santander 123 credit card. Think I might close the sainsburys card down an apply for one of those. I spend about £40 a week on petrol and the same on food for 2 of us. The misses also spends £100 on her monthly train ticket.

JakeGreen

Chrisandsarahs wrote: »

I've been looking at the santander 123 credit card. Think I might close the sainsburys card down an apply for one of those. I spend about £40 a week on petrol and the same on food for 2 of us. The misses also spends £100 on her monthly train ticket.

I'm a big fan of the 123 Account and Credit Card. Once it's set up it's an easy few hundred pounds cashback each year. It's almost worth it for the 3% on fuel alone!

addyboy1982

Another fan here of the 123 Credit Card - I haven't earned less than £15 cashback per month so far. Everything goes on it, and it's paid in full every month!