Too much credit?

cardsguy

Hi,

I have been in the UK for 7 months (20 something graduate from Eastern Europe), and from the start tried to build a good credit rating - mostly following the tips on this forum.

- I first applied for an Aqua card, got 1200 limit which doubled automatically in 1.5 months - now 2400 GBP
- Applied for a BA Amex, got approved with a limit of 3000 GBP - this was mostly for the Avios as I tend to frequently fly BA
- Applied for a Lloyds Duo Avios for the 0% foreign exchange fee - my main account is with Lloyds, about 13k in savings - asked for 3000 GBP limit, but got 7000 instant approval.

My question is, since my salary is only 55-65k, would the high total credit affect my chances of getting a mortgage, or getting approved for additional credit in the future? My credit utilisation usually hovers around 500-1000 GBP, though it's a little higher now because of a skiing holiday. I usually pay in full every month, even though I may sometimes have 100 GBP leftover balance on the Lloyds 0% deal.

Should I close off cards that I would no longer use or need - such as the Aqua, because it also has the highest APR of 29.9%? Or would spreading my spending across all of them lead to a better credit profile in the future?

Thanks!

Nebulous2

You don't have high available credit. People on here seem to regard 50% of salary as available credit as the point where lenders become concerned.

Personally I'm not convinced that it is that tight. I've had available credit over my salary for many years. For big periods of time I had credit available of twice my salary.

msallen

Your available credit is only around 20% of your salary so that's not at all high. No need to be concerned about that.

However the Aqua card has done its job now (got your foot in the door for credit), so I would suggest that its of no more use to you, and as it will undoubtedly have a high APR I would cancel it unless you need access to the credit it offers over the next few months.

Having applied for 3 cards in the last 7 months, I would hold fire on applying for any more now for a few months.

chrisw99

Hello,
Was there a typo in your first post, because you say you are 20 something and your salary is "only 55-65k". That's probably higher than 90% of the people on these forums and going to rub a lot of people the wrong way as it sounds like you consider 65k a low salary!

planteria

no need to be concerned, providing you don't use the available credit and get yourself into a position where you can't pay back without paying interest.
but fwiw i would drop Aqua and either keep the other two, or choose between them...whichever is best for your spending habits/plans.

Ebe_Scrooge

chrisw99 wrote: »

Hello,
Was there a typo in your first post, because you say you are 20 something and your salary is "only 55-65k". That's probably higher than 90% of the people on these forums and going to rub a lot of people the wrong way as it sounds like you consider 65k a low salary!

Exactly the same thing occurred to me - I consider myself to be fairly comfortably-off these days ( for the first time in my life, I've been on the bread line many times in the past ! ), but I don't earn as much as that. It's either a typo or a troll.

Leafeysurrey

If the medium term goal is to build a good credit history then you may want to consider keeping all the cards active, do a minimum spend on each card every month to show you're using the cards and pay them all by direct debit. You may take a bit of a hit for a while with high interest rates but, if the goal is to maneuver yourself into a more competitive borrowing position then it may be something else to consider.

VivaTibet

Ebe_Scrooge wrote: »

Exactly the same thing occurred to me - I consider myself to be fairly comfortably-off these days ( for the first time in my life, I've been on the bread line many times in the past ! ), but I don't earn as much as that. It's either a typo or a troll.

It's not a troll, it's what's called a "humblebrag" wherein someone shows off about their good situation by worrying/complaining about it. Cardsguy obviously works in finance/consulting/the city some occupation where he will get a fairly substantial bonus (hence why he gave a band instead of single figure for his salary).

My advice to him would be aware that things change, I was on 46k at 23 but it's not forever

JimmyTheWig

Leafeysurrey wrote: »

If the medium term goal is to build a good credit history then you may want to consider keeping all the cards active, do a minimum spend on each card every month to show you're using the cards and pay them all by direct debit. You may take a bit of a hit for a while with high interest rates but, if the goal is to maneuver yourself into a more competitive borrowing position then it may be something else to consider.

High interest rate won't hit you if you pay off in full each month.

jonathanp89

60k doesn't sound crazy to me. I earned a similar amount 2 years after graduating. I realize it sounds a 'high' salary to many people, but sadly life's not fair - some professions are valued much more from others. From the point of view of someone earning that much at the start of the career it is 'low' compared to their more senior colleagues who will be earning much more. People I worked with who were just one step up from me were on 6 figure salaries.

Personally I hated earning that much money. I never asked for it, I just got offered it. I just felt so guilty and undeserving of it. I gave thousands of it to charity. One time a landlord neglected to pay me back my deposit after I moved out, so instead of chasing him I just let him keep it. I quit eventually and now earn much less but am much happier.

Leafeysurrey

JimmyTheWig wrote: »

High interest rate won't hit you if you pay off in full each month.

I agree Jimmy however credit conduct may just swing a later mortgage decision. The original poster has only been in the UK 7 months and, if they are paying off the full amount each month on each card, then their entire UK credit history is running at a loss to lenders. They may take that on board.