Overall credit limit

thesaver79

Hi All,

I think I found this information on here in the past, but I can't seem to find it now.

What's a healthy percentage of the annual income to be an overall limit for all credit cards and overdrafts? I have no debts and I own a property outright.

I understand there wouldn't be a universal answer, but maybe a rough figure?

planteria

healthy in what way? i would always try to get the highest limit i could, for flexibility. but have to be disciplined and not allow yourself to be sucked in to real debt.

my CL is about 10 times my Salary [accepting i have other income], and has been working healthily, for me, for years;)

thesaver79

planteria wrote: »

healthy in what way? i would always try to get the highest limit i could, for flexibility. but have to be disciplined and not allow yourself to be sucked in to real debt.

my CL is about 10 times my Salary [accepting i have other income], and has been working healthily, for me, for years;)

When I say healthy, I mean with a credit exposure that wouldn't be "too much" and would prevent me from getting more credit.

So you're saying, your total credit limit is 1000% of your annual salary? Let's say you ear £30,000 per year... you have a combined CL of £300,000? Sounds a bit much to me.

planteria

much for who?? it all depends what you are trying to achieve.

to be fair, i am probably not a typical example, and have been spending and BTing fairly actively for years.

limits on new applications have certainly become more cautious in recent years, but there are other factors, such as previous use, that are taken into account.

pjread

that's an interesting question, my limits are up to perhaps 40% of income and I was contemplating lowering some or closing a card or two.

Does experience suggest there's no value in doing that, I thought perhaps there might be in terms of limit to anticipate when getting a new 0% card?

thesaver79

pjread wrote: »

that's an interesting question, my limits are up to perhaps 40% of income and I was contemplating lowering some or closing a card or two.

Does experience suggest there's no value in doing that, I thought perhaps there might be in terms of limit to anticipate when getting a new 0% card?

I'm glad you understand where I'm coming from

thesaver79

Just to clarify, this is taken from here:

8. Myth: It doesn’t matter how many credit accounts you have
Truth: Lenders want to be sure that you can afford more credit, so they prefer it if you don’t already owe large amounts on multiple accounts. They can also take into account the amount you could borrow against your credit limits, so it’s best to close down unused accounts and limit the number of new applications you make.