Any point in having a high limit?

Lungboy

I took out a student Barclaycard in 1997, with a limit of £250. Over the years, BC have steadily increased my limit, and it's now at £10050. I almost never use it, always pay it in full as soon as it's been used, and I can't see myself needing that kind of limit at any time in the future, so is there any point in having such a high (to me) limit? Conversely, I'm not currently looking for a house or any other kind of credit, so is there any downside to keeping it so high?

Jsscmm

Personally I try to avoid too high limits, ie way over what I will use the card for, as I feel it detracts from the potential limit on the next card. However if you aren't going to get one, the only downside I could see is increased scope for money to be stolen. There are various protections in place and statistically it may not happen...

Nasqueron

Lungboy wrote: »

I took out a student Barclaycard in 1997, with a limit of £250. Over the years, BC have steadily increased my limit, and it's now at £10050. I almost never use it, always pay it in full as soon as it's been used, and I can't see myself needing that kind of limit at any time in the future, so is there any point in having such a high (to me) limit? Conversely, I'm not currently looking for a house or any other kind of credit, so is there any downside to keeping it so high?

If you don't want a BT or 0% purchase card, no it's fine, paying off in full every month will look best on your credit report. There is a sort of rule of thumb on credit limits of giving you about 50% of your salary as available credit (not absolute by any means) so if you were on £21k you might find a new card or loan is more limited because of the potential to spend and run up a huge debt but you can always reduce the limit a couple of months before you plan to apply for anything.

NoviceAngel

I did have some extremely high limits on some MBNA cards, I think around £15,000 each! and a Halifax card at £12,500 but I'm talking years ago, and since then most card accounts are closed or dormant.

I like the Kudos or having such high limits, it's a bit like getting my first GOLD Amex card in the 80's.

All that gold and Platinum nonsense seems to have gone with the Thatcher years, now I have a Halifax Clarity with a £5k limit, still spend the same and use exactly the same as in the 80's but it doesn't really go with the fake Rolex! like the real Amex Gold did lol....

So no harm in a lower limit, just a kodos hit!

EDIT :- Just to add I even remember getting a letter saying that Amex were axing the Amex Gold card I had and replacing it with Amex Blue and that when my card expired it would arrive with the new Amex Blue logo, I'm ashamed to admit the month before they closed the Gold card I reported my card as lost knowing that it would be replaced with another Gold, so I kept my Kudos for another three years!

Paul_1977

First card I had gave me 2.5k on 17k PA.

I don't like having high limits as its easily to keep spending small amounts and it soon adds up, also if its stolen they might go on a blitz.

I don't like any limit higher than 3k. But they continue to keep offering upgrades but I refuse.

InsideInsurance

Other lends like to see you have high limits from others as its evidence they trust you and you can manage having them and not immediately go on a blow out weekend to Vegas

On the flip side high limits will count against you when the affordability tests are applied unless you also have a very high income.

andyfromotley

InsideInsurance wrote: »

Other lends like to see you have high limits from others as its evidence they trust you and you can manage having them and not immediately go on a blow out weekend to Vegas

On the flip side high limits will count against you when the affordability tests are applied unless you also have a very high income.

Now I instinctively agree with this, however i wonder is there any evidence that this is actually the case? Just wondering.

Feral_Moon

I have five very high limit cards (excess of £50k between them) plus a couple with smaller limits for every day spending. My income is currently less than half the credit available to me. I've held these cards for many years and they just keep increasing the limits on them. I've not needed to apply for a new card for over 5 years now as they all regularly off 0% BT deals.

InsideInsurance

andyfromotley wrote: »

Now I instinctively agree with this, however i wonder is there any evidence that this is actually the case? Just wondering.

You'd need to speak to an underwriter or someone who's worked with the algorithm used for computerised decision making.

I've only secondhand information and most of it coming from organisations where lending is a secondary activity but certainly they liked it and the CRA in question who was providing a consultancy service in one case also claimed the industry norm was to like it.

Foxy-Stoat_3

0% balance transfers aside, if you can afford to be £10K in debt on a credit card then leave the limits alone, juts incase you may need it in the future.

Just for information, the interest on this amount would be around £180 a month and minimum payments are going to be around £260. So it will take a good few years to clear it should you ever use it.

So the question you need to ask your self is, can I afford to be £10,000 in debt on this card?

YorkshireBoy

I share the view that credit card lenders like to see high limits on existing accounts...providing salary will support them of course.

I have a £25K MBNA limit (not used in anger for 2-3 years now, just the odd purchase or two), and all other cards I'm accepted for are giving £9-10K limits (Halifax, Sainsbury's, Santander 123, Nationwide, & YB being the most recent). The lowest limit I have is on Santander Zero at £2K, and that's by choice (I swapped some from here to my 123 card).

Like a previous poster, my limits total well in excess of my salary.