Advice - credit limit reductions?

mjrs85

Hi All,

First of all would like to say, long time visitor to the site, but first time poster. Have found this site, and reading through the forums, very helpful in getting by bottom in gear over the last 4 years with reducing my debts down, so big thanks to all who contribute :-)

I'm just after a bit of advice really. My debt currently stands at around 10 grand (which is a hell of alot better than a few years ago!)

That debt is currently spread across 7 different cards :-(
That's hopefully not as bad as it sounds though. Half of my debt is on 2 cards that I got 0% balance transfers on (bank of scotland, virgin). The vast majority of the rest my debt in on 1 other card (post office) which has a reasonable apr (compared to the others at least!)

Of the other 4 cards, I have 1 card with absolutely nothing on it (capital one), but I'm just keeping it open in case of emergencies. This has a 2k credit limit. The other 3 (aqua, vanquis, natwest) each have only a couple of hundred on them max, and I was hoping to have them all closed within the next 2 months, though due a few things I have coming up, this might end up dragging on a bit later into the year.

I'm very tempted to apply for another 0% card to try and both reduce interest on, and consolidate my outstanding debts. Eligibility checker looks favourable for me on a few cards, but obviously I'd want to maximise my chance of getting a larger limit to cover as much of my outstanding debt as possible.

My question is, before applying for anything, is it worth me closing the card I have nothing on, and reducing my limits as far as possible on the cards that are nearly paid off to reduce my currently available credit, assuming I can't close those immdediately?

I'm just reluctant to close the one I have nothing on (capital one). It's the card I've had open the longest, and as I said, always handy to have for an emergency...not that I've used it any point recently. Though on saying that, getting a 0% balance transfer would hopefully free up at least some credit on my more favourable apr card (post office) for emergencies.

Sorry to waffle, hope the above all makes sense! And many thanks in advance for any advice.

Matt

mjrs85

On reading back all that I've just written... is it worth me considering shifting the debt from Aqua, Vanquis, and Natwest, onto my Capital One card?? I believe I can do balance transfers onto Capital One, and although the rate wont exactly be brilliant (understatement there!), it would allow me to close 3 credit cards immediately.

NHS_worker_bee

mjrs85 wrote: »

On reading back all that I've just written... is it worth me considering shifting the debt from Aqua, Vanquis, and Natwest, onto my Capital One card?? I believe I can do balance transfers onto Capital One, and although the rate wont exactly be brilliant (understatement there!), it would allow me to close 3 credit cards immediately.

Hi

Have Capital One actually offered you a Balance Transfer deal (and if they have, what is the APR ?)

I'd be tempted to keep the card you have had open the longest if it has a good repayment history on it, this looks good on your credit file, a longstanding, well managed CC account is better than lots of newer ones.

So if it would be possible for you to do a balance transfer without taking out new credit, I would do that, because you already have quite a lot of credit cards (7). This isn't a criticism, I'm in a similar situation myself and considered getting another card but I'm trying to just snowball and pay off my highest APR card first. Best wishes

http://www.whatsthecost.com/snowball.aspx?country=uk

mjrs85

Thanks for your reply NHS worker bee!

I did a bit more digging after my initial posts. I can do balance transfers on capital one, but certainly no deals with them! I do however currently have a small amount of available credit on both my Virgin and Bank of Scotland cards, and both are currently offering me 0% deals :-) (Virgin 12 months, and BoS 21 months). It would be enough between them to balance transfer and then close both my Natwest and Aqua cards. I also have enough spare cash at the end of this month (touch wood!), to fully pay off and close my Vanquis card.

That would leave me with 4 cards in total rather than 7, one of those being a currently fully clear Capital One card.

It would still leave just over half of my debt not on a 0% deal, so although I fully take on board what you're saying, (and over the last year or so I have been trying to work within my already available credit, as applying for further credit certainly wasn't an option until recently!) I'd still like to apply for further 0% balance transfer credit fairly soon.

Would closing the 3 cards I am in a position to close, and perhaps reducing my Capital One credit limit down a bit (but keeping open, as my longest card), put me in a better position for being given more 0% credit. As I said, the eligibility checker seems to think I have a good chance of acceptance on numerous cards. But even if I did get accepted, I have a feeling the credit limit offer would be minimal if I applied right this minute. I'm not expecting to get offered an amount that would cover my entire debt, but I just want to maxamise my chances of covering as much of it as possible in the short term.

Thanks!

Matt

MallyGirl

I tried the 'reducing my limit on an empty card' approach - nearly 3 months on it still hasn't been reflected on my credit report

mjrs85

Ooooo, do you know if that's normal Mally? I did consider things may take a month or so to show up on credit reports, so I wasn't planning on closing my cards and then applying for new ones the very next day. But 3 months sounds needlessly lengthy? :-S

MallyGirl

no idea - it took 2 months to show me paying off that same card

NHS_worker_bee

mjrs85 wrote: »

Thanks for your reply NHS worker bee!

I did a bit more digging after my initial posts. I can do balance transfers on capital one, but certainly no deals with them! I do however currently have a small amount of available credit on both my Virgin and Bank of Scotland cards, and both are currently offering me 0% deals :-) (Virgin 12 months, and BoS 21 months). It would be enough between them to balance transfer and then close both my Natwest and Aqua cards. I also have enough spare cash at the end of this month (touch wood!), to fully pay off and close my Vanquis card.

That would leave me with 4 cards in total rather than 7, one of those being a currently fully clear Capital One card.

It would still leave just over half of my debt not on a 0% deal, so although I fully take on board what you're saying, (and over the last year or so I have been trying to work within my already available credit, as applying for further credit certainly wasn't an option until recently!) I'd still like to apply for further 0% balance transfer credit fairly soon.

Would closing the 3 cards I am in a position to close, and perhaps reducing my Capital One credit limit down a bit (but keeping open, as my longest card), put me in a better position for being given more 0% credit. As I said, the eligibility checker seems to think I have a good chance of acceptance on numerous cards. But even if I did get accepted, I have a feeling the credit limit offer would be minimal if I applied right this minute. I'm not expecting to get offered an amount that would cover my entire debt, but I just want to maxamise my chances of covering as much of it as possible in the short term.

Thanks!

Matt

Doing the balance transfers and then closing the two or three cards you are in a position to close sounds like a good start. Credit files should be updated monthly to reflect this but (in my personal experience) sometimes this can take longer.

So I would a) do the balance transfers b) close the cards (and ask for this in writing from the CC companies to confirm the accounts are definitely closed) then c) check your credit file the next month to see if this has been updated then once it has d) apply for another 0% balance transfer card which the MSE eligibility checker says you are likely to get.

(Again, this is just my personal experience) I applied for a 0% balance transfer card which the MSE eligibility calculator said I had an 80% likelihood of getting - I got offered a different card with a much lower credit limit (£500 instead of the advertised £1500) and shorter interest free period and higher APR afterwards. However, it seems like you are prepared for this being the case so if it will save you money and help you pay off the higher APR debt first, it could be worthwhile. Hope this helps

mjrs85

I'll do the balance transfers this evening which will allow me to hopefully close the Aqua and Natwest cards once they're all processed. Then, should the rest of my April spend go to plan, I'll have money left over to pay off Vanquis a bit closer to pay day, and close. This should hopefully see me heading into May with 4 credit cards rather than 7

Then come June/July, when the dust has had time to settle on my credit report, I might be able to get a bit more 0% credit. Well....more than I would right now, fingers crossed!

Thanks for your replies honey bee

NHS_worker_bee

That sounds like a well thought out plan. This time last year, I was at the maximum limit of my CC and there is no way I would have got a balance transfer. However, once I had cleared some of my debt I successfully applied for two CCs with a 15 month 0% balance transfer offer (and a low fee). This had made a big different to my repayments, I can now make bigger payments to the higher APR debt and can see myself being debt free at some point in 2015 (and closing the cards is good because then you won't be tempted to use them again) best of luck

mjrs85

Good work and best of luck to you too with your 2015 target!

Sounds like I was in a similar situation to you over the last few years. All my cards were maxed and I was paying off an outstanding loan, and I had no hope of getting any further credit to help (and to be fair, if I did get further credit back then I would have just spent it!). I had to cut back on the lifestyle I was living a bit, throw any spare money I could towards my debts, and fortunately my final loan payment was January this year Much like you, I'm just wanting as much of my debt on 0% as possible, so that more of the money I'm putting towards it is actually paying it off rather than just covering interest.

Still a long way to go, but this forum and all I've read on it has certainly helped massively!