Credit limits on new 0% card

trickydicky14

Up to two weeks ago I had three active credit cards only one of them being used to any degree, I then paid off and closed one of them, Santander 123 due to the end of its 0% on purchases period and pending increase in fees.
Now looking at new 0% card 'Halifax' and have been given a 90% chance of getting it via a soft search.


So if I get the card I'm looking for a long period of 0% and as high a credit limit as possible.
Having read that maximum credit limits tend to be around 50% of income would I be better closing a second credit card before I apply for it (working on the idea I would be offered a higher credit limit) or would it look bad for some reason having paid off and shut down two cards in as many weeks?
I have never missed a card payment.
Thanks for any thoughts on this.

Dobbibill

Have you asked your credit card providers if they have any deals for you with 0% or an increase in credit limit?

What are you trying to do? Make purchases and spread the cost or do a BT?

Candyapple

trickydicky14 wrote: »

Having read that maximum credit limits tend to be around 50% of income would I be better closing a second credit card before I apply for it (working on the idea I would be offered a higher credit limit) or would it look bad for some reason having paid off and shut down two cards in as many weeks? I have never missed a card payment. Thanks for any thoughts on this.

I have never heard of this. I think you are perhaps getting mixed up with a general rule of thumb that your cumulative limit doesn't tend to exceed half your annual salary.

If you only had 3 credit cards and wanted to close down 2, this would temporarily effect your credit worthiness because of the credit : debt ratio.

E.g;

Card 1: £100 owed / £1,000 limit
Card 2: £200 owed / £2,000 limit
Card 3: £1,500 owed / £2,000 limit
£1,800 / £5,000 = credit utilisation = 36%


If you closed cards 1 and 2 and kept card 3 open:
Card 3: £1,500 owed / £2,000 limit
£1,500 / £2,000 = credit utilisation = 75%

If you decide to close the second card, it would probably be best waiting a few months for the impact of both cards being closed from affecting your credit history too much and also in the meantime getting the credit utilisation rate down to at least below 50%.


If you want a high credit limit, this is usually based on your salary and also the limits of your other cards sometimes comes into play. Also some lenders are more lenient than others whereas other lenders are more stingy with their limits.

newforms80

I've credit cards from a few providers. My highest limit (approximately 25% of my income) is from Amex- but this has grown over the years, it started probably closer to about 5-7%.

Recently, because I'm moving, I opened two new 0% credit cards for new purchases to pay off over the next 2 years- MBNA gave me around 10% of income (and were my first application). I applied to Virgin money also and they gave me around 18% of income (after the MBNA app).

I've a few cards with other banks I've had over the years, most of them with limits of around 50% of the recent ones- they were made whilst I had no debt (which I still do) but it definitely seems that MBNA and Virgin are amongst the more generous on new accounts.

trickydicky14

Thanks all for replies, have taken the plunge and applied for Halifax credit card.


Have been offered 24months % on purchases and a very good credit limit so am made up about that.