Massive Aqua Increase

Anthorn

PinkyUnd wrote: »

Hi guys,

So, I've got a terrible credit rating but a few months ago, I tried to get a credit card, being in a much better financial position and was accepted for an aqua start credit card. It was only a low limit of £100 but it was great to have a start.

For three months, I paid the majority of the balance off, leaving a little on each month. However, after three months, I was offered (and accepted) an increase to £1100. I've had a little read online and found people offered £500 or a little above but to be raised by £1000 seems massive.

Wondered if anyone knows why or if anyone else has had similar experience?

Thanks.

Pinky

Your definition of "massive" is different to mine. My idea of "massive" is pretty big. At the time I closed my Aqua Advance my credit limit was £7,500.

Aqua (Newday) do take notice of how you have operated the account and also take notice of the regular credit reports they receive about you. If have paid on time and not gone over limit you haven't taken on a lot of credit, you haven't defaulted anywhere and you are using your Aqua credit limit they will increase your limit. In my case it took 4 years to get from £250 to £7,500 so the increases although regular were not particularly rapid.

markharding557

PinkyUnd wrote: »

Deteriorated? No, I haven't had any problems. I've only left some behind on the card as I read that may help to improve my credit rating.

Hi,
Here is how I have used credit cards to improve my credit score while keeping additional costs to a minimum:
I have two cards, one has a much higher limit than the other. Every so often I make purchases on the higher interest one and then later transfer the debt to the other card incurring an effective one off charge of 3%. I don't need to do this, have cash in the bank, it is to create a record good credit use.

This procedure creates a record of debt management and repayment which improves credit scores. Utilisation of the cards must be kept low so only use a small portion of your limit, payments must be on time and well above the minimum.

bigadaj

markharding557 wrote: »

Hi,
Here is how I have used credit cards to improve my credit score while keeping additional costs to a minimum:
I have two cards, one has a much higher limit than the other. Every so often I make purchases on the higher interest one and then later transfer the debt to the other card incurring an effective one off charge of 3%. I don't need to do this, have cash in the bank, it is to create a record good credit use.

This procedure creates a record of debt management and repayment which improves credit scores. Utilisation of the cards must be kept low so only use a small portion of your limit, payments must be on time and well above the minimum.

Sounds a bit unnecessary.

Make small purchases on both cards, pay off in full after the statement date, rinse and repeat.

No need to pay interest or incur balance transfer fees, it's the record of responsible use of credit and the ability to manage a credit line that is important, so long as that is recorded by the credit agencies the great, and they can supply you with whatever made up number for your credit score they want.

Jlawson118

PinkyUnd wrote: »

Hi guys,

So, I've got a terrible credit rating but a few months ago, I tried to get a credit card, being in a much better financial position and was accepted for an aqua start credit card. It was only a low limit of £100 but it was great to have a start.

For three months, I paid the majority of the balance off, leaving a little on each month. However, after three months, I was offered (and accepted) an increase to £1100. I've had a little read online and found people offered £500 or a little above but to be raised by £1000 seems massive.

Wondered if anyone knows why or if anyone else has had similar experience?

Thanks.

Pinky

Yeah earlier this year, around February I started off with the Aqua Advance card and they started me off with £300, and late May I got a letter saying they were increasing it to £1050. I hadn't used the card for a good few months though as I was accepted on a reward card

PixelPound

I think its standard practice by Aqua - give you a very low limit initially to limit their exposure, and up it once you have shown you are able to manage your account.

There does seem to be a lot of conflicting information on the black arts of credit building, such as leaving a balance on each month. I think this comes from posts saying card providers don't like people who clear their account each month. This IMO is less applicable to those building credit, and is dubious how they would find the information out.

On your credit file, providers may report what your balance was and whether you made just the minimum payment - I don't believe there is a paid-in-full flag, though some report how much you paid. I suppose if you spent on a card once a month and immediately pair that sum off, then you would be showing zero balances. However if you used it for everyday spending and paid the statement balance in full, there would always be a balance on your card but paying the full statement balance would mean you don't incur interest. You would also know that if you use it instead of your bank card then there should be the funds in your account still so paying in full shouldn't be a problem.

redux

nic_c wrote: »

There does seem to be a lot of conflicting information on the black arts of credit building, such as leaving a balance on each month. I think this comes from posts saying card providers don't like people who clear their account each month. This IMO is less applicable to those building credit, and is dubious how they would find the information out.

There seems to be almost a kind of paranoia or at least unnecessarily deferential feeling there.

And maybe it involves some misthinking. If someone pays off most but not all of the balance, they will still be charged interest according to the amount and the time. Paying say 90% of the outstanding amount certainly doesn't mean only 10% of the interest will be charged.

Especially with these high interest rate cards, that feeling really needs to be avoided. Make the effort to pay the full statement balance. Avoid interest where possible, and let the credit rating sort itself out later. Getting a grip on the current card is more important than some hypothetical new application several months in the future.

Anthorn

redux wrote: »

There seems to be almost a kind of paranoia or at least unnecessarily deferential feeling there.

And maybe it involves some misthinking. If someone pays off most but not all of the balance, they will still be charged interest according to the amount and the time. Paying say 90% of the outstanding amount certainly doesn't mean only 10% of the interest will be charged.

Especially with these high interest rate cards, that feeling really needs to be avoided. Make the effort to pay the full statement balance. Avoid interest where possible, and let the credit rating sort itself out later. Getting a grip on the current card is more important than some hypothetical new application several months in the future.

No-one can give such advice unless they have evidence to back it up and no-one that I know of can give concrete advice based on concrete evidence. The best we can do is make assumptions based on our own personal experience. Assumptions which are not based on personal experience are best disregarded.

My post in this thread is based on my own personal experience of Aqua over nearly 5 years. I think I know what works but even so what works for me might not work for someone else. What worked for me was in fact to not clear the full balance every month and allowing Aqua to make a small profit on a small balance. In fact I've carried what I learned with Aqua over to other cards and the same applies: I get increases in my credit limit and other offers on those cards which I have kept a small balance (Lloyds) and no increases at all on those where I don't keep a balance (MBNA) even when applied for.

hign10pines

I'm doing it all wrong then I started at £100 which jumped to £200 after one month, after that nothing My interest has dropped only slighty though.

redux

Anthorn wrote: »

No-one can give such advice unless they have evidence to back it up and no-one that I know of can give concrete advice based on concrete evidence. The best we can do is make assumptions based on our own personal experience. Assumptions which are not based on personal experience are best disregarded.

My post in this thread is based on my own personal experience of Aqua over nearly 5 years. I think I know what works but even so what works for me might not work for someone else. What worked for me was in fact to not clear the full balance every month and allowing Aqua to make a small profit on a small balance. In fact I've carried what I learned with Aqua over to other cards and the same applies: I get increases in my credit limit and other offers on those cards which I have kept a small balance (Lloyds) and no increases at all on those where I don't keep a balance (MBNA) even when applied for.

They don't make only a small charge on a small remaining balance; they charge interest on the amount borrowed and for the time it was borrowed.

So for example paying £450 off a balance of £500 makes no difference at all to the amount of interest already calculated to that point. And at Aqua rates that is not low. Paying the extra £50 would save £15 to £20 interest. In relative terms that is a pretty big marginal gain, especially when done every month

Or if your spending is much lower than that, why would you aspire to a larger credit limit on cards you barely use? You might as well just use a debit card and save the rigmarole of more transactions.

I'm no expert either, and things have changed over the years, but in the past I saw that the fastest increases in credit limit were on cards with high spending and/or balance transfer, and statement paid in full each month. That comment doesn't all apply now though, as balance transfers are worked differently.

ViolaLass

Anthorn wrote: »

No-one can give such advice unless they have evidence to back it up and no-one that I know of can give concrete advice based on concrete evidence. The best we can do is make assumptions based on our own personal experience. Assumptions which are not based on personal experience are best disregarded.

My post in this thread is based on my own personal experience of Aqua over nearly 5 years. I think I know what works but even so what works for me might not work for someone else. What worked for me was in fact to not clear the full balance every month and allowing Aqua to make a small profit on a small balance. In fact I've carried what I learned with Aqua over to other cards and the same applies: I get increases in my credit limit and other offers on those cards which I have kept a small balance (Lloyds) and no increases at all on those where I don't keep a balance (MBNA) even when applied for.

What evidence do you have that you got those limit increases because you don't pay off in full rather than because you've never missed a minimum payment?

I've had similar increases too and I've never paid a penny in CC interest.