Recent CC applications came with High risk APR but also high credit limits?

vacheron

Hi All.

I'm a bit puzzled with some of my recent credit card company decisions and was wondering if some kind of activity on my credit file could be to blame?

I tend to overlap two or three 0% credit cards at any one time and have done so for about the last 10 years.When a 0% rate expires I pay off the balance in full, close the card, wait a few months for it to leave the credit file then apply for a new one. I never balance transfer. Over the last couple of years some limits have been decent (Tesco/Santander @ £14-15K) and some laughable (Bank of Scotland @ £2.5K).


Halifax Clairty CC (Applied 6 months ago)

I applied for a Halifax Clarity Card as I needed a good card for overseas spending. No promotional rate so DD set up to pay the balance in full each month.
Requested a 2K credit limit as I only needed it for hols etc.

When the card arrived I noticed that the APR was at the middle rather than headline rate. I have always been on the headline rate before so I assumed for some reason they considered me a "medium" risk, but the credit limit they gave me was double what I had requested? This seemed strangely contradictory, however I didn't worry too much about it as I wasn't going to be carrying a balance on that card anyway.


Sainsburys Nectar CC (Applied this week)

I applied online for a new CC to replace one of my expiring 0% cards and decided on the Sainsburys Nectar credit card with 25 months 0% on purchases.

When the card arrived I this time found myself on the highest interest tier of 28.9% which must mean I am in the highest risk bracket they were willing to accept, however the credit limit provided was almost £20K. (over 3 times what I requested) and I was given this figure instantly online after submitting the application.



I can't make any sense of this at all. Why mark someone as high risk but give them 3 times the credit they applied for. Does it make sense to anyone else?


Edit: Should add that I am a homeowner, same address for the last 6 years, employed, decent salary, no missed anything ever, on electoral roll. Nothing showing on Experian report from 2 months ago and nothing on Noddle when I signed up for my free report yesterday, however they rate me 3/5 (589/999) which doesn't seem good though I've no idea why. (Not that this means anything of course, it was free!:-).

Candyapple

If you're getting £20k limits and on 0% promotional rates, does it really matter what the APR is given that you said that you clear the balance in full before the end?

Halifax Clarity - it could be that if you already hold an account with Halifax they will monitor how you run it, or if you have no accounts with them depending on your other credit commitments could have led to you having the middle band APR.

Maybe Sainsbury's put you on the higher APR because they've given you a higher limit, in the hopes that you'll use it and forget to clear your balance at the end - thus making them lots of money in interest charges. Who knows.

You are clearly doing something right if you are not being declined and getting high limits.

Also, Noddle scores are not out of 999, that is the banding Experian use.

Noddle:
up to 500 - Poor
501-550 - Fair
551-600 - Good
601-650 - Very Good
651-800 - Excellent

Lest we forget that these scores whether from Noddle or Experian are worthless and mean nothing.

Noddle usually marks you down a couple of points if you have made more than 1 application/search. Ignore the scores, carry on with your excellent credit history. Just use Noddle/ClearScore as guides to make sure you haven't had any ID fraud, all your accounts are showing correctly etc.

YorkshireBoy

I think it's all about can (s)he/will (s)he pay back!

A decent salary shows you can (afford to) pay back, but something on your credit history perturbs them and they're questioning will (s)he (be able to) payback, so they're hedging their bets and looking to make more in revenue just in case any of the capital is at risk.

For years and years I'd been an A1 customer with Halifax & Lloyds, always getting good limits and APRs. These days, because of (stoozing) debt on my file (£40K+ amassed fee-free over a 3 month period this time last year) I've dropped down an APR tier at Halifax (and Lloyds have cut my limit!), so if I took their Clarity card I'd be on the middle tier as you are (despite all my recent Halifax & Lloyds cards having circa £10K limits).

vacheron

Thanks to you both for the advice and the clarification regarding the Noddle scores (meaningless as they may be) 😊.

The cynic in me did consider that possibly the high rate and limit were there to try and generate more revenue and perhaps that is the case.

Regarding the clarity card, I had a Halifax account for 20 years (and a parallel joint account for seven of those years) which I ran without incident, however I left last year for a switching incentive, so who knows maybe they got the hump! 😄
The worst credit limit have ever been offered was the Bank of Scotland (aka Halifax) and shows on the same online banking page as the clarity card so maybe I just didn't fit their target market.