Please help! Balance transfer credit limit too low!

allacesal

Hello,

I am new to the site and this is my first post so apologies if this is in the wrong place!

I have a Halifax Clarity Credit Card with a balance of £3,200. I want to transfer the balance to a 0% interest card, so applied for the Low Interest Lloyds 32 months card.

Whilst Lloyds accepted my application, they only gave me a limit of £1,000, so I ended the application. After calling Lloyds they advised that any other debts I have, including loans and other credit cards would go against how much they could offer. I advised that I have no loans or any other forms of debts, only the rest of my credit limit on the Halifax Clarity Card (credit limit £6050).

I have since called Halifax and reduced my credit limit to £3,500. Will this be enough for me to attain a balance transfer card with another bank with a high enough credit limit to transfer all £3,200 at once? And if so, how long should I wait until I apply again!? (Lloyds customer services said it can take 6-7 weeks for reducing your credit limit to effect your credit score?!

Any help would be MUCH appreciated!!!

Many thanks,

Alastair

YorkshireBoy

You've made two mistakes here:

Firstly, you should have taken the Lloyds card. At least a 3rd (very roughly) of your debt would have been on 0%. As it is, and until you can shift it somewhere else, that £950 (£1K x 95%) is costing you £10 a month in interest...unnecessarily! That's if you're on 12.9% APR. If you're on their top tier it could be nearer £20 a month!

Secondly, reducing your credit limit means your credit utilisation is now much higher (91% vs 54% as it was), meaning you will appear maxed out to any new lender searching your files.

Best approach now?...throw in another application somewhere else. And this time, take whatever you're given!

And see if you can cancel the Clarity credit limit reduction.

Candyapple

Have a read of this:
http://www.moneysavingexpert.com/credit-cards/bad-credit-rating

A bit premature cancelling the Lloyds card as now you've got a wasted search on your files.

You actually probably made things worse for yourself if you reduced your Clarity limit to £3.5k and owe £3.2k on it as now your credit utilisation has gone up to 91%.

Yes it can take up to 2 months for the limit reduction to show across all 3 credit reference agencies.

No point waiting it out, just apply elsewhere as another search on your file shouldn't impact it that much.

You have no choice in how much of a limit a card company will issue you, it all depends on your salary, your credit history, credit utilisation etc. Even though lots of card companies have sections where you can input how much you would like, it's pointless as it makes no difference to the outcome of your credit limit.

Candyapple

YorkshireBoy wrote: »

You've made two mistakes here:

Firstly, you should have taken the Lloyds card. At least a 3rd (very roughly) of your debt would have been on 0%. As it is, and until you can shift it somewhere else, that £950 (£1K x 95%) is costing you £10 a month in interest...unnecessarily! That's if you're on 12.9% APR. If you're on their top tier it could be nearer £20 a month!

Secondly, reducing your credit limit means your credit utilisation is now much higher (91% vs 54% as it was), meaning you will appear maxed out to any new lender searching your files.

Best approach now?...throw in another application somewhere else. And this time, take whatever you're given!

And see if you can cancel the Clarity credit limit reduction.

Good post, great minds think alike


With regards to cancelling the credit limit reduction, not possible with Halifax as once it's done there's no going back - you have to wait 6 months before applying for an increase again.

YorkshireBoy

Candyapple wrote: »

With regards to cancelling the credit limit reduction, not possible with Halifax as once it's done there's no going back

All the more reason to get another application (or two!) in ASAP then.

andyfromotley

try MBNA/Barclaycard/Virgin, anecdotally they seem to be the most generous.

allacesal

Ok thanks for the quick responses.

I've been on to Halifax and they said to call in the morning and they will put the limit back up for me.

Also spoken to Lloyds and they said it should be fine if I reapply online.

So just to double check if I put my credit limit back up with Halifax that will improve my credit rating, and if I'm successful with Lloyds again but don't have the sufficient limit to transfer all my balance, should I look to take out more than one 0% credit card to cover the balance I want to transfer?

Thanks again

YorkshireBoy

allacesal wrote: »

I've been on to Halifax and they said to call in the morning and they will put the limit back up for me.

Don't build your hopes up!

Also spoken to Lloyds and they said it should be fine if I reapply online.

I wouldn't risk it. Even if they do accept you (and I don't personally think they would so soon), they've already indicated what they think of you by granting a £1K limit first time around. Move on somewhere else. Maybe MBNA as mentioned above.

So just to double check if I put my credit limit back up with Halifax that will improve my credit rating

No that's not what we're saying at all. How can we? What we're saying is the utilisation will be better. That said, if your income, and other financial circumstances, aren't high enough, then your available credit to income figure may already be too high.

should I look to take out more than one 0% credit card to cover the balance I want to transfer?

I believe we've already suggested that haven't we?

Candyapple

allacesal wrote: »

Ok thanks for the quick responses.

I've been on to Halifax and they said to call in the morning and they will put the limit back up for me.

Also spoken to Lloyds and they said it should be fine if I reapply online.

So just to double check if I put my credit limit back up with Halifax that will improve my credit rating, and if I'm successful with Lloyds again but don't have the sufficient limit to transfer all my balance, should I look to take out more than one 0% credit card to cover the balance I want to transfer?

Thanks again

I would double check that again if I were you because when I last reduced my Halifax limit they asked me 3 times throughout the call if I was sure as once done it couldn't be undone (that was in Jan 2015). Also check that they aren't going to credit check you to increase your limit as well.

If you reapply with Lloyds you are just going to be adding another credit search on your file, why would you reapply with them when you know you're only going to get a low limit? That ship has sailed. You are better off as Andy has said applying with other card providers.

Ideally you want to be looking at one card if possible to transfer your balance onto. But if that's not possible, then yes apply for another.

allacesal

Ok guys thanks again for the help, sorry if I didn't quite understand you first time round or repeated myself, my head is hurting as balance transfers are quite new to me.

I'll let you know what happens anyway and thanks for your help

allacesal

Update as promised.

I have had an application with Bank of Scotland accepted with a limit of £1,000. So, I have transferred £950 of my Clarity Card balance to BOS with 32 months interest free, part way there!

One last question (I promise), is there a limit on how many balance cards you can have? I'm now planning on applying for another 2, assuming they both offer a similar limit of £1,000??

P.S. Halifax were able to stop the credit limit reducing so it's still at £6,050

Many many thanks