Lowering and raising credit limits

GaryG

I currently have 3 active credit cards with the following credit limits:
A = £3000
B = £6000
C = £7000

Ironically, I use credit card "A" for my most expensive purchases because it offers me 1% cashback, but it currently has the lowest credit limit.

Therefore, I am thinking of trying to lower my credit limit on both credit cards "B" and "C" and raising the credit limit on credit card "A"

However, before I do something I might regret, I have a couple of questions:
1. Does lowering credit limits have any negative affect on credit rating?
2. I know there are no 100% gurantees, but how likely is it that I would be able to raise the credit limit of credit card "A", after lowering the credit limit on both credit cards "B" and "C"?

Thanks for any help and a Happy New Year to all!

Stigy

GaryG wrote: »

I currently have 3 active credit cards with the following credit limits:
A = £3000
B = £6000
C = £7000

Ironically, I use credit card "A" for my most expensive purchases because it offers me 1% cashback, but it currently has the lowest credit limit.

Therefore, I am thinking of trying to lower my credit limit on both credit cards "B" and "C" and raising the credit limit on credit card "A"

However, before I do something I might regret, I have a couple of questions:
1. Does lowering credit limits have any negative affect on credit rating?
2. I know there are no 100% gurantees, but how likely is it that I would be able to raise the credit limit of credit card "A", after lowering the credit limit on both credit cards "B" and "C"?

Thanks for any help and a Happy New Year to all!

The higher the limit the better, assuming spending is relatively low/mediocre. Why would you want to lower the limits? To creditors it looks like you have thousands available to you, but no need to use this amount. It looks like you're using credit sensibly. Somebody else might be able to offer more in terms of advice, but I've been sorting my own finances out over the past few years and this is what I've learned.

Shakin_Steve

GaryG wrote: »

I currently have 3 active credit cards with the following credit limits:
A = £3000
B = £6000
C = £7000

Ironically, I use credit card "A" for my most expensive purchases because it offers me 1% cashback, but it currently has the lowest credit limit.

Therefore, I am thinking of trying to lower my credit limit on both credit cards "B" and "C" and raising the credit limit on credit card "A"

However, before I do something I might regret, I have a couple of questions:
1. Does lowering credit limits have any negative affect on credit rating?
2. I know there are no 100% gurantees, but how likely is it that I would be able to raise the credit limit of credit card "A", after lowering the credit limit on both credit cards "B" and "C"?

Thanks for any help and a Happy New Year to all!

Point 2: Why lower cards B and C first? Try to raise the limit on A first.

System

Why don't you close one of the other cards, rather than lowering limits.

GaryG

Heng_Leng wrote: »

Why don't you close one of the other cards, rather than lowering limits.

That's a good question, and I do have reasons not to close either of them completely:
- Card "B" is a Sainsbury's Mastercard and although I only use it on Sainsbury's Groceries and Fuel, I get a load of Nectar points with it whilst using it in Sainsbury's. In 2016 I amassed around £200 worth of points, so it is well worth keeping, although outside of Sainsbury's it is worthless only giving me 1 point for every £5. Therefore I use the other cards outside of Sainsbury's
- Card "C" is a candidate for closure, it is a standard Visa which came with my current account, but it still gives me 0.5% cashback on any purchases, so I want to keep it as a backup card whenever/where ever card "A" is not accepted; card "A" is Amex :cool:

GaryG

Shakin_Steve wrote: »

Point 2: Why lower cards B and C first? Try to raise the limit on A first.

I suppose that was part of my original question. Would being rejected due to having too much overall credit be a negative for my credit rating!?!

Nebulous2

GaryG wrote: »

I suppose that was part of my original question. Would being rejected due to having too much overall credit be a negative for my credit rating!?!

Have you any reason to suspect you would be rejected due to having too much overall credit? I'm not convinced that makes much difference. I have over twice my salary in credit card limits and very readily get more.

What is likely to be more important is how much you are using. Over 50% of salary in used credit is an issue. Also percentage of credit used is a concern for lenders. Reducing your limit will make that worse.

Superscrooge

There is no guarantee that lowering the credit limit on cards B and C will improve your chances of increasing the limit on card A. Each lender will have their own criteria for when they will consider a credit limit. eg. They may want 12 months of satisfactory use before they will consider a credit increase.

Sometimes credit providers won't even combine the limits on two of their own credit cards. I had an old Tesco CC with a large credit limit and applied for a new Tesco 0% BT card but was only given a much lower credit limit. I assumed if I closed the old card they would add the limit to the new one, or at least increase the limit. But they wouldn't budge.

Ben8282

Try to get the limit on card A raised but do not lower the limits on cards B and C. This is wrong thinking. You will become a low limit type of person and be given low limits.

System

Unless, C is a Nationwide card (with forex free spending) then I'd still be inclined to cancel as you'd only be getting the marginal benefit between Sainsburys and Amex spending.

GaryG wrote: »

That's a good question, and I do have reasons not to close either of them completely:
- Card "B" is a Sainsbury's Mastercard and although I only use it on Sainsbury's Groceries and Fuel, I get a load of Nectar points with it whilst using it in Sainsbury's. In 2016 I amassed around £200 worth of points, so it is well worth keeping, although outside of Sainsbury's it is worthless only giving me 1 point for every £5. Therefore I use the other cards outside of Sainsbury's
- Card "C" is a candidate for closure, it is a standard Visa which came with my current account, but it still gives me 0.5% cashback on any purchases, so I want to keep it as a backup card whenever/where ever card "A" is not accepted; card "A" is Amex :cool: