Reducing catalogue limit & credit file

iwanttoberich

I have £5000 credit limit on a catalogue. I know that I will never use it and want to ask them to reduce it by half. I read in one of the other forums that reducing a limit makes you look as though you are reducing your limits in order to handle your debts better.

Sounds odd to me. Why should I keep a high limit on a useless catalogue just so other lenders won't think I can't handle my debts? Can someone clarify please?

Trajal

You may be confusing two different concepts here.

On the one hand, it's good to have some credit because it demonstrates that you can deal with it and repay it when needed etc.

However, on the other hand you don't want to have too much useless 'headroom' on the available credit to you because it may deter other credit providers from giving you credit. They might worry that you have too much available credit and if you maxed out all of it then you potentially could struggle to repay it.

Reducing the available credit on a catalogue could benefit you as firstly, the other lenders will see that it was available previously, and secondly it reduces your overall exposure. If you cut your catalogue limit to £1k that potentially means that the £4k you had could be redistributed to other credit sources. It doesn't work quite like that in reality, but it's not a bad thing to have a sensible level of credit on a single provider rather than a very high limit that you will never use.

TheGenerus1

Does anybody know just how much do lenders take into consideration mail order accounts as opposed to credit accounts when tallying up available credit overall?

I have the same limit on a catalogue as the OP and would like to reduce the limit to try and gain more credit on my other credit accounts (in theory).

Are mail order accounts treated the same as credit accounts? or do they treat the mail order credit limits separate from credit account limits when assessing whether on not to potentially raise your credit limit on your credit cards accounts?

I think this might be helpful for the OP as well.

brokebuthappy

I'm wondering this, too. I had a £5000 limit with Very and was concerned as they had been steadily upping the limit every few months for the past number of years, and I was wondering where it would end!:rotfl:

Last October I emailed them and asked them to reduce it to £2000 as I felt uncomfortable with the previous amount of credit considering I never ordered above the value of £300.

Now I'm wondering if it was a good move or not. Having researched old threads on MSE beforehand regarding this, I thought it was the wisest move. Thoughts?