Credit Limit During Unemployment

that_tdg_guy

Hi,

I've handed in my notice at my current job and have 4 weeks left to work.

I don't have another job lined up, I am instead taking time out primarily to re-train and prepare my portfolio for a change in careers. I intend to be out of work for no longer than 3 months, but that is not guaranteed.

My final salary payment will be at the end of December, when my notice period ends. At that point I will have:

- approximately 2.25k in an online saver
- 1.8k remaining of a 5k Virgin Money credit card limit, with well over 18 months interest free period remaining.
- Emergency second credit card with £0 balance and 4k limit, but interest free period finished.
- £2000 overdraft on current account which incurs a monthly fee. Haven't been into the overdraft for about a year. Current account balance will be basically £0 at end of December.

My questions are:

- Can my credit limit be lowered by the credit card company if they choose? If so, how much notice will I have?

- Will the credit card company have access to my employment status? If not, will they have knowledge of the incoming (or lack of) money into my current account?

After carrying out a quick credit check on noddle, I have a good credit rating, and the balance of my current account was shown for every month this year as £0 (even though it has been well above £0), only my previous negative overdrawn amounts from 2014 were shown. My employment status was not shown.

I assume this means the credit card company will see the same information?

My overheads are fairly low, so I could get by if the limit was lowered, but it would ease the pressure slightly if I know I can rely on the available interest free credit on the Virgin card.

Thanks in advance.

grumbler

that_tdg_guy wrote: »

- Can my credit limit be lowered by the credit card company if they choose? If so, how much notice will I have?

They can do this at any time and without any advance notice.

- Will the credit card company have access to my employment status? If not, will they have knowledge of the incoming (or lack of) money into my current account?

No

YorkshireBoy

Your biggest problem could be the bank reducing, or calling in, the overdraft facility if their systems pick up on a reduced throughput. The chances of this happening will be significantly increased should you have cause to use the facility. You may therefore wish to use the cards, rather than the overdraft facility (leaving it as a source of last resort funds).


Might not happen straight away, but just something to bear in mind.

that_tdg_guy

Thanks very much for the reply.

YorkshireBoy wrote: »

Your biggest problem could be the bank reducing, or calling in, the overdraft facility if their systems pick up on a reduced throughput.

When you say this might be a problem, are you referring to the credit card company carrying out a routine credit check, noticing the bank have lowered my overdraft limit, therefore lowering my credit limit? Or just that the overdraft itself may be reduced?

My plan is to rely completely on savings for payment of rent and bills etc, by transferring from the savings account into my current account, then using the interest free credit card for food and general spending. So in theory I won't be using the overdraft facility at all, it's there for absolute emergencies really.

Cheers

YorkshireBoy

that_tdg_guy wrote: »

Or just that the overdraft itself may be reduced?

This ^^


The credit card providers won't know you're not working and your income has ceased. However, if you check your credit card T&Cs you'll almost certainly see that they request you let them know "if your financial circumstances change" (or words to that effect). But I can't see anyone doing that!

that_tdg_guy

Thanks both, definitely feeling more exited and less stressed about this leap of faith in myself now :j

YorkshireBoy wrote: »

However, if you check your credit card T&Cs you'll almost certainly see that they request you let them know "if your financial circumstances change" (or words to that effect). But I can't see anyone doing that!

I do vaguely remember seeing words to that effect when I was looking at the various cards available and applying for this one, but I've dug out my T&C's booklet expecting to see it in there and surprisingly I can't find it.

Either way - I won't be informing them!

Thanks again.