Is having a high limit on credit cards bad?

jamesperrett

Paul_1977 wrote: »

How does one get such a limit? What do you have to earn?

Apply for the right cards (Barclaycard and MBNA both seem to offer high limits), use them sensibly and then wait for a few months. I sometimes wonder if they deliberately offer to raise the limit after you pay back (or balance transfer) a hefty sum in the hope that you'll transfer the debt back to them in the future.

um85

adindas wrote: »

If you do not take advantage of having two 15,000 limit each. As you also confirm that you clear all of your balance each month, there is no point to have both credit card with high limit. One credit card with reasonable high limit is enough.

You will never know what the potential lender is thinking, even your mortgage lender will not have the definite the answer. Rather then speculate, it is probably better to ask to reduce the limit of one of your card as you are not taking advantage of having both with such limit anyway.

I agree with having the one card at the high limit MIGHT be enough, problem is on occasion I max out a card before end of a month, I would be happy with two lower limits but not sure one card would cut it just in case. Also one is an Amex so....always need a backup.

As I'm sure someone will ask, my job involves a lot of traveling.

Butti wrote: »

With a high limit technically there is the opportunity to go on a mad spending spree or for someone to nick your card and do it for you.
Maybe ask yourself how much you need?
Having said that, if you reduce it too much you then usually can't increase it again for six months.

That sort of what I was worried about partly, also if i reduce it that they ding my credit score for reducing the amount on a card.

Paul_1977 wrote: »

How does one get such a limit? What do you have to earn?

I think as a few people have said its not really down to what you earn but picking the right card. Though saying that I had quite a difference in salary between picking up these cards and the one I cancelled before and the starting credit limit was substantially higher.

Doctor_Duke wrote: »

I think that Experian would indicate that having a high limit is a positive marker to lenders. When it comes to a Mortgage it's the debt you have on them that's the issue and in your case, that's none if paid off. Also do consider that lenders like a good payment history and you being able to manage debt responsibly and I think this would be overall positive for you.

Thanks for the confirmation, I was hoping that having a good payment history would sort of balance out the fact that you could incur a large amount of debt in a short period.

SLZ

um85 wrote: »

Also one is an Amex so....always need a backup.

Credit or charge? If credit have you considered switching to a charge card as depending on what you have at the moment, you could get better rewards, this should remove any worries about high credit limits and future mortgage problems due to them as you'll pay it off in full each month unless of course you need the revolving limits?

20aday

um85 wrote: »

I agree with having the one card at the high limit MIGHT be enough, problem is on occasion I max out a card before end of a month, I would be happy with two lower limits but not sure one card would cut it just in case. Also one is an Amex so....always need a backup.

As I'm sure someone will ask, my job involves a lot of traveling.



That sort of what I was worried about partly, also if i reduce it that they ding my credit score for reducing the amount on a card.



I think as a few people have said its not really down to what you earn but picking the right card. Though saying that I had quite a difference in salary between picking up these cards and the one I cancelled before and the starting credit limit was substantially higher.



Thanks for the confirmation, I was hoping that having a good payment history would sort of balance out the fact that you could incur a large amount of debt in a short period.

BIB: your credit score shouldn't really be taken into consideration because each lender uses their own methods when it comes to applying for finance etc.

I was talking with my Mum the other day and she couldn't understand why Barclays Bank wouldn't offer her a loan. Signed her up for Noddle and her available credit was actually more than she's salaried for!

Granted I've read posts on here from different users and there are quite a few people out there in a similar position but there's nothing to stop my Mum (or someone else, fraudulently) maxing out those accounts.

Am hoping she's listened to me and is working out who to close....

um85

SLZ wrote: »

Credit or charge? If credit have you considered switching to a charge card as depending on what you have at the moment, you could get better rewards, this should remove any worries about high credit limits and future mortgage problems due to them as you'll pay it off in full each month unless of course you need the revolving limits?

Its a credit card, I suppose I can look into the charge ones and see if they have any better rewards. Really just need to be able to spend a lot on a credit card each month, doesnt matter to me whether its charge/credit.

20aday wrote: »

BIB: your credit score shouldn't really be taken into consideration because each lender uses their own methods when it comes to applying for finance etc.

I was talking with my Mum the other day and she couldn't understand why Barclays Bank wouldn't offer her a loan. Signed her up for Noddle and her available credit was actually more than she's salaried for!

Granted I've read posts on here from different users and there are quite a few people out there in a similar position but there's nothing to stop my Mum (or someone else, fraudulently) maxing out those accounts.

Am hoping she's listened to me and is working out who to close....

Thats the reason I decided to just go with an advisor vs going to a bank/looking online. I found a trusted one through a family member. Didnt want to have to deal with each lenders varying criteria.

I have the ability to check a credit score through barclaycard as its a thing they offer. But im not even sure if thats just barclays credit check or if they contract out to experian or something. Seems a bit fishy to me though, according to them my credit score has been the highest 999 or 1000 or whatever it is ever since I've checked it through barclaycard.

jamesd

Credit is safer to you because of the protection you get which doesn't apply when not using credit.

High credit card limits are essentially irrelevant for mortgage lending. Conduct of the account matters though.

Barclaycard get the Experian credit score from Experian. It's mostly useful if you see it changing so you can see what sorts of thing affect it.

Ben8282

I believe that you should not reduce either of the credit limits and that you should accept the credit limit increase offered.
Speaking in general terms, when a credit limit is reduced nobody except you and the credit card provider concerned know who reduced the limit and why. This could cause potential lenders to think that the limits have been reduced by the credit card providers due to a concern about something. Also, reducing credit limits is easy. Getting them increased again is not always so easy. Lenders increase limits when the increases are not needed; they are not so quick to increase them when you actually want or need the increase.
Speaking in terms specific to you, I note your comment that on occasion you max out a card before the end of the month. That implies a 50% (or greater depending on the balance of the other card) utilisation ratio for that month which is not good. It has been said that utilisation ratio is not important when balances are repaid in full each month but circumstantial evidence has suggested to me that it is. Based on the high amount of money that you are spending on your cards, I would suggest that a higher total available credit amount would be better for you.
If your income is such that on occasion you spend £15K on the cards in a single month, then I don't really think that your mortgage application will be affected by high credit limits as such limits are appropriate to your circumstances.
However, if you do not have a high income and you are in a situation similar to myself some years ago when I was spending large amounts of money every month on employer-reimbursed long haul travel expenses (although I never managed 15K in a single month), then I would take steps to ensure that any potential mortgage lender was fully aware of what such expenditure was and be prepared to provide evidence of where the money was coming from to pay the bills. If this is the case I would also recommend that you give serious consideration to moving this spending to a charge card. The reason is very simple. Charge card bills need to be paid in full every month otherwise the account will be quickly defaulted. You do not have the opportunity to make the terrible mistake of deciding not to pay your credit bill in full one month and getting into debt in relation to expenses for which you have already been reimbursed. I am not suggesting that you would do this but a potential lender might consider the possibility.
I am slightly confused about one thing. You say that your two credit cards are Lloyds and Barclaycard but you also say that one is an Amex. I know Lloyds and Barclaycard do issue duo cards one of which is an Amex, but neither bank issues a stand-alone Amex.

marksoton

You're over thinking things as regards a mortgage application. Underwriters are there for a reason.

If credit limits were an issue i'd have been screwed as my Amex card has no preset spending limit.

TheEffect

I have a £10k limit on my Barclaycard cashback.

If you put in a high number when requesting a limit increase on their website, it will tell you what they are willing to offer you as a maximum. At one point they offered £14k. Right now it says I can have £11,300, but I'll keep it at £10k for now.

Ironically, I use my Lloyds Avios credit card most, and they wont increase my limit from £1k.

Just applied for a MBNA BT card, £5.5k limit straight away.

daniel86_2

It all depends on the banks stance it looks good that you are deemed credit worthy enough to have a high limit but also may look bad that you could quickly get into debt with all that disposable credit at hand, a mortgage advisor would be able to say for definite. You could always call and get your limits reduced.