What is a reasonable credit limit on a Credit Card / Cards!

TopCat1978

We have recently paid off all our credit cards and the cards are not being used.

A lot of them have been closed as my credit limits across all my credit cards totalled almost £60,000. However, I have kept a couple because of the benefits but I am not sure whether that is sensible and whether I should apply to reduce the limits on a couple or whether I don't actually need them.

Barclaycard - Limit was £13,900 and I tried to close it but it turned into a battle of wills so I didn't in the end but I have reduced the credit limit to £1,000

MBNA - £4,500 which gives points which I change into vouchers

Capital One - £4,000 for cash back

Halifax - £15,000

MBNA - £10,100

The Halifax one I plan to close after the next statement as there is a credit on there which I can claim back when the interest is charged.

I like the idea of keeping one of the £4k credit cards but would it also be wise to keep the larger MBNA card?

What I am not sure of is whether I will need the large one as I don't plan to use it and it would be for emergencies.

Will it affect my credit rating if I keep the three?

Thanks in advance

M0ney

Personally I have just applied (successfully) for my 3rd cc and plan to give one the bullet so I'll be back to 2. Currently the 2 I have are both £2,000 limit and I'm not sure what my 3rd one will be as I haven't yet received my account information, card, PIN etc...

But my take on it is, why would you want to have much more credit that you are ever likely to be able to afford to spend in one month? If you do, you run the risk of not being able to repay in full at the end of each month and ending up servicing a cc debt, not only that lender tend not to like to see someone who has a lot of unused credit at their disposal.

Of course there are differing opinions on this but that's my view on it.

stator

Unless you have a specific reason I would get rid of all but two credit cards. Having so many will reduce your available credit and reduce your chances of getting a mortgage.
What is the most amount of money you can imagine spending? If you needed a new central heating boiler, would you need to use the credit card? What if you needed a new car? Or if you wanted to book a holiday online and get the extra protection from using a credit card?
Personally I can't think of any reason to have more than 4k limit, I reduce mine all to 2k or below.

TopCat1978

Thanks for the replies. What you have both said agrees with what I was thinking. I thought of keeping one of the £4k limit cards and then one big one for emergencies - such as car, house things until we have built up a little nest egg for emergencies.

I am not planning on applying for any credit (just remortgaged) but just want to try and improve our credit rating.

Thanks again

[Deleted User]

Topcat1978 wrote: »

Barclaycard - Limit was £13,900 and I tried to close it but it turned into a battle of wills so I didn't in the end but I have reduced the credit limit to £1,000

A battle of wills with whom?

YorkshireBoy

Bedsit_Bob wrote: »

A battle of wills with whom?

Presumably their customer retention team, who offer various deals (0%, LOB, £50 credit to the account, etc) in order to persuade you to keep the account open.

However, I wouldn't have slashed the limit so much because it could send the wrong message to other lenders when they search your file.

planteria

i would have approached it this way:
kept the Barclaycard with the full limit.
merged the MBNA limits onto one account and retained.
chosen/applied for a spending card: cashback/points/rewards...whatever you want.
and used the first 2 for emergencies / balance transfer deals.
i have spent years building up my Barclaycard and MBNA limits...so i don't like to see people giving them away;)

System

I'd suggest bar keeping one as a spare, always have a reason to keep a credit card.

This could be points, cheap to use abroad, good limit, offers or even just to have more than one card type (Visa, MC or Amex).

As for the limits, I personally found I only used around 4/5k per card even when limits are much higher.

TopCat1978

Thank you all, the battle of wills was with the detentions guy, in the end he gave me a £50 credit to the account which cleared a little of the balance before I cleared the rest.

Hadn't thought about it looking bad to others for the reduction in the limit. I would have closed it if I could. May try again! I didn't want the barclaycard because it reminds me of the debt we once had (sorry of that sounds strange) and the associations with it.

The one mbna and capital one give cash back / rewards so they would be my card of choice but with the limit of £4k I thought a higher one would be better for emergencies.

Would it be best to keep the halifax card as it is not with the same lender (mbna)?

Does it look bad to close lots of accounts too?

Thanks again!

thebritishbloke

Topcat1978 wrote: »

Thank you all, the battle of wills was with the detentions guy, in the end he gave me a £50 credit to the account which cleared a little of the balance before I cleared the rest.

Wow. I wish I got paid £50 when I got detention.

Hadn't thought about it looking bad to others for the reduction in the limit. I would have closed it if I could. May try again! I didn't want the barclaycard because it reminds me of the debt we once had (sorry of that sounds strange) and the associations with it.

The one mbna and capital one give cash back / rewards so they would be my card of choice but with the limit of £4k I thought a higher one would be better for emergencies.

Would it be best to keep the halifax card as it is not with the same lender (mbna)?

Does it look bad to close lots of accounts too?

Thanks again!

It doesn't look bad to close accounts. I'd keep whatever card you prefer to bank with.

BarclayCard will probably transfer your account to their BarclayCard Cashback card if you ask them, which pays 1% cashback. Personally, I'd contact them and ask them if they're willing to transfer you and give you your higher limit back, and then close all the other accounts.

YorkshireBoy

Topcat1978 wrote: »

in the end he gave me a £50 credit to the account

Wait a couple of months, call again to close the account, and you'll get another £25...seriously!