Is It Better To Reduce The Credit Limit On A Card If You’re Not Using It?

sonnydeletejc

Hi Folks,

I have a NatWest credit card to which I recently transferred a balance of just under 3K from an old card, to take advantage of the 22 month 0% on balance transfer deals NatWest were offering.

The new Natwest card has an 8K limit on it, so I have about 5K headroom. I don’t intend on using any of this headroom, so wondered if it would be wise to have the credit limit reduced to the 3K I have on there?

The reason I ask is that I want to apply for a new 0% purchase card, and want to make sure that from a credit score point of view I’m in the best shape possible.

Would you reduce the limit?

Thanks.
J

JustinCredibleGillespie

To be honest you may not have to so long as your income isn't 50% of your available credit. Is this the case?

JCG

xx

CKhalvashi

On an £8k limit, I personally wouldn't (although I have a 6 figure income)

What do you earn? If it's less than £16k, you may be best to do this, if not, then you will probably be ok.

CK

Hominu

3K balance and 3K limit would be 100% utilisation, so applying for another card may be seen as wanting more credit as you've maxed your current card.

8K limit and 3K used would look better, assuming your wage is 16K or higher (so your credit vs salary is <= 50%)

StuC75

also in reducing the CL it wouldnt be apparent as to whether it was customer of lender decision.. some suggest its best to close down un needed credit... Everything is guess work as lenders can have different criteria - i.e. Low Utilisation of available credit could be viewed as sensible management \ shopping spree\crash waiting to happen or a Rate Tart that bounces balances around and ultimately isnt as profitable...

sonnydeletejc

Thanks for the replies everybody!

Yes, thankfully I'm on the right side of 16K, so I think I'll just leave it as is and hope for the best with my next application!

Cheers.

J

sam042013

I think yoe just leave it as is. Just don't overspend.

londonTiger

it will be reduced automatically over time if you neevr use it. I've had a few 5k limit cards that have dropped a a grand or so each year.

Mikhail

Irrelevant. I have £45k+ available on credit cards and banks are increasing my credit limit again and again. Never been refused.

YoungBusinessman

I never use more than 30% the balance. Only fuel goes on and cleared each month, it has just been increased again, 6 months after the last increase. Without me even asking.