How much is too much credit?!

daverave7

I got turned down for a santander credit card recently, but I thought I had a very good credit score.

One reason might be because my total credit currently available (on multiple credit cards) is close to my annual salary.

Is there any rules here to when credit card firms will reject applications because of the amount of credit one already has available? How much? Is this related to salary?

Cheers

grumbler

There are no any rules, and there are many other factors involved. Some people even with ~50% credit(available)/income ratio report problems, some have it well above 100%.
Without doubt when close to 100% it's getting very critical.

I guess, generally, the smaller the gross income, the smaller the threshold, as the the disposable income get close to zero.

1DayAAT

I really don't understand it all that well! I have a full and clean credit history with about 13 years of spotless payments across credit cards, loans and phone contracts (and now mortgage). I've never had a problem getting credit and my credit cards total limits available are more than my annual salary but my use of them very low. I've never been declined for any credit and have been approved first time on any loans, credit cards and even mortgage. My income is modest. I really am not sure what the make or break is on these as I don't consider I'm doing anything differently to what a lot of others do and seem to get turned down a lot more.

DalePie

1DayAAT wrote: »

I really don't understand it all that well! I have a full and clean credit history with about 13 years of spotless payments across credit cards, loans and phone contracts (and now mortgage). I've never had a problem getting credit and my credit cards total limits available are more than my annual salary but my use of them very low. I've never been declined for any credit and have been approved first time on any loans, credit cards and even mortgage. My income is modest. I really am not sure what the make or break is on these as I don't consider I'm doing anything differently to what a lot of others do and seem to get turned down a lot more.

You have to remember though...

It's not your "credit worthiness" they are checking, it's how profitable you'll likely be if they take you on.

With a completely spotless record (Not paying many fees Either) you'll look like a terrible customer and not very profitable.

It's the reason why some people get rejected for 0% tart rates, the bank looks at their record and thinks "tart" or they just don't believe they'll get their profit from them.

guesswho2000

I wouldn't worry, I got declined for a Santander 123 CC in Feb, didn't bother asking why, but my available credit exceeded 100% of salary at the time (and has since).

In April, I got a message in online banking (Santander) stating guaranteed acceptance for the 123 card. I proceeded anyway and they gave me the card.

Since then I've also had a new Barclaycard (as an existing cardholder) and the Marriott card (issued by Creation). Although my available exceeds my salary, my outstanding balances are low, which may be a factor, but, from my experience and in my opinion, available credit vs salary doesn't have much of an affect.

Thrugelmir

daverave7 wrote: »

One reason might be because my total credit currently available (on multiple credit cards) is close to my annual salary.

From a lenders perspective why do you need another account then.

Bonfire_Bride

Thrugelmir wrote: »

From a lenders perspective why do you need another account then.

I was thinking this too...

Nebulous2

I think I've posted this before, my available credit is well over my salary (throwback to the old days when credit cards were very available.) I applied for and got a Santander 18 months on purchases card with £6800 limit earlier this year.

I don't know what that says, other than that 100% certainly isn't an absolute barrier!

g6jns_2

daverave7 wrote: »

I got turned down for a santander credit card recently, but I thought I had a very good credit score.

One reason might be because my total credit currently available (on multiple credit cards) is close to my annual salary.

Is there any rules here to when credit card firms will reject applications because of the amount of credit one already has available? How much? Is this related to salary?

Cheers

Given that your income can service less than a tenth of the credit you already have it is no real surprise. Ask yourself if you really need another card? What is the practical use of some much credit that you cannot service it? A total credit limit of twice your average monthly spend is realistic. That covers for the delay until the previous month is paid off.

MadProf

g6jns wrote: »

A total credit limit of twice your average monthly spend is realistic.

Some here would arguably want to maximise their returns on cashback, airmiles, points or some other incentive by charging large expenditures to the relevant card and then paying it off in full.

Presumably the OP already has a number of cards that fulfils his financial requirements (a 0% BT card, a 0% MT card, a CB card, etc.) so if more credit is required (and it probably is not) he could request limit increases from the lenders he already hold accounts with.

If OP is after some introductory promotion available only to new customers (0% purchase cards springs to mind) then unused existing CC accounts should be closed and OP should attempt a re-application in 3 - 6 months for those deals.

daverave7

Thrugelmir wrote: »

From a lenders perspective why do you need another account then.

To get the best offers. i.e. introductory offers. Barclaycard are only offering my 0 % for 6 months currently.