Such a thing as too much credit?

FreddieFrugal

Thanks for feedback all. I've got the AmEx now it arrived yesterday, along with PIN for the clarity card. Got everything set up.

In relation to the discussion so far in this thread, I've seen on my Halifax online account that I can set my own credit limit quite easily for the Clarity card.

SO question is should I leave it as it is at £3000 or reduce it. As I have said it's only going to be used on holidays, we don't spend a huge amount of money when we're away anyway. Especially if we've already paid in advance. We only spent about £120 when we went for 2 week cruise and stay to Turkey in summer. £50 paid on card to an Ephesus tour company and the other £70 taken in lira in advance.

I know we won't always just be doing all inclusive though and don't want to limit ourselves too much. Just £3000 seems a lot of credit to someone who spends max of £1000 in an expensive month e.g. car services due or leading to Christmas and usually £500-£600.

If I hired a car for us on holiday, I know that companies ask for a deposit preferably given via credit card. If I used a standard credit card would I incur any foreign use fees in this sort of situation. Would I be best using the Clarity. I'm not sure as obviously I would have paid in advance online anyway and the figure stated is in pounds so I don't know how it would be worked out.

Anyway that would mean it would be worth keeping an extra amount above what I'd expect to spend on the Clarity. If not then could just use my other card.

Sorry this is turning a bit rambling. Anyway does anyone have any thoughts on the credit limit. I'm thinking £1500-£2000 should be plenty. But am I limiting myself unnecessarily?

Would welcome advice from people more experienced in this area

thanks

YorkshireBoy

IanRi wrote: »

If I hired a car for us on holiday, I know that companies ask for a deposit preferably given via credit card. If I used a standard credit card would I incur any foreign use fees in this sort of situation. Would I be best using the Clarity. I'm not sure as obviously I would have paid in advance online anyway and the figure stated is in pounds so I don't know how it would be worked out.

Even if you've paid in advance in this country, ie through a broker such as Holiday Autos, you're required to present a credit card in resort for any excess.

Many hirers will simply pre-authorise (circa £600-£1000 equivalent) the amount. Others will charge the account then refund later if no damage. Obviously with the latter you'll lose out on the fees for overseas usage with a 'standard' card.

Even if you bought zero excess cover here (as I do) they'll still charge the card and you then claim back on your UK insurance so still lose out on the fees.

Anyway does anyone have any thoughts on the credit limit. I'm thinking £1500-£2000 should be plenty. But am I limiting myself unnecessarily?

Personally I'd leave it, as you may subsequently find it's nigh on impossible to get it lifted again if you change your mind...certainly within the first year or so.

My lowest limit card is £6K (and my highest is almost £25K), but I use them for a different purpose(!). However, my Santander Zero card (my overseas card) has a limit of £8K and I'm happy to leave it there. After all, you never know what emergency you'll have to deal with whilst overseas.

FreddieFrugal

YorkshireBoy wrote: »

After all, you never know what emergency you'll have to deal with whilst overseas.

Very good point. That's why I'm on the fence a bit. It's all about not wanting to over stretch myself with unused credit when we could be applying for mortgage in not too distant future. But I do agree completely that having it there, at least on this particular card, could be safer.

CLAPTON

IanRi wrote: »

Very good point. That's why I'm on the fence a bit. It's all about not wanting to over stretch myself with unused credit when we could be applying for mortgage in not too distant future. But I do agree completely that having it there, at least on this particular card, could be safer.

you may also wish to reflect on the issue that un-used credit cards are sometimes cancelled.
So using a card only when abroad may be an unused card for some long time.
better to use each card regularly even if only to buy some petrol or everyday purchase

YorkshireBoy

IanRi wrote: »

It's all about not wanting to over stretch myself with unused credit when we could be applying for mortgage in not too distant future.

Mortgage lenders are more concerned about what actual debt you have (and it's servicing costs) rather than how much debt you could get yourself into after they've released the funds (in my opinion and experience).

And even if they were concerned they'd simply ask you to reduce the limits (and provide proof of course).

But...what's to stop you lifting them again after completion and/or applying for more credit cards?

So, I'd leave it/them where they were and deal with any mortgage underwriting issues when and if they surface.