Credit Limit reduced

dggar

Had a letter today from Co-oP about my credit card.


They want to reduce my credit from £5000 to £3850 saying I never go anywhere near my current limit.


If I want it to remain at £5000 I should contact them within the next 30 days.


My usual spend is about £1000 a month which I always pay off in full.


What are the Pros & Cons about accepting what Co-oP propose?

YorkshireBoy

To get you started:

Pros:
Less available credit
Increased chance of obtaining credit/decent limits elsewhere

Cons:
Utilisation increases
May look to other lenders that the lender has been spooked into cutting your limit (these days your CRA files show limit history).

A more fundamental question would be what are you getting out of the Co-op card?...0% on purchases?...cashback? If nothing, maybe you should consider replacing it with one with benefits?

dggar

YorkshireBoy wrote: »

To get you started:

Pros:
Less available credit
Increased chance of obtaining credit/decent limits elsewhere

Cons:
Utilisation increases
May look to other lenders that the lender has been spooked into cutting your limit (these days your CRA files show limit history).

A more fundamental question would be what are you getting out of the Co-op card?...0% on purchases?...cashback? If nothing, maybe you should consider replacing it with one with benefits?

I have several other cards, including Asda, Halifax, Nationwide, HSBC so it's not a case of looking for a replacement.


I suppose I'm really wondering what are the disadvantages to me if I let Co-oP lower the limit.

jumperabv3

YorkshireBoy wrote: »

(these days your CRA files show limit history).

How long does it remain for, this record of credit reduction? Is it for 6 months?

YorkshireBoy

jumperabv3 wrote: »

How long does it remain for, this record of credit reduction? Is it for 6 months?

Up to 6 years!

No_6

but no one will know why the limit has reduced,
it may have been your own request.