Does it matter how much you spend?

DarrenW80

Hi everyone

I have a few more questions that I hope you could clear up for me. Firstly say for example you had a credit card with a £5,000 limit, you put £20 on it each month and paid it back in full when the statement was due, would this go against you? Would they close your account or decrease the credit limit because you were only putting a little amount on the card each month? Lastly what would be the chances of a limit increase if you were only spending £20 a month and paying it back in full?

[Deleted User]

They may decrease your limit. Most lenders will tighten up their exposure from time to me.

Account closure is much less likely.

Money_Rollercoaster

I don't think they would see any need to increase your limit. Increases in my credit limit have always followed (sustained) spending which made a reasonable dent in my existing limit. I do remember Co-Op dropping my limit from about 8k to a few hundred pounds a few years back, which I think was on the back of an extended period of dormancy.

Sncjw

Why would you need the increase if your only spending £20

DarrenW80

Sncjw wrote: »

Why would you need the increase if your only spending £20

They don't need to I am just trying to find out how it all works

forgotmyname

With my card i spent 1/2 to 3/4 of the credit limit in a month and paid it off in full and they automatically increased the limit.

ceb1995

I was spending 1/4 of my limit and paying off in full for about three months and they kept increasing it, doubt it will go above the 2.5k it is now though.

bearcat16

I spent £14.99 per month (never any more nor less) on my nationwide select credit card. 4 years ago the limit was £3,500, now it's £13,750 after incremental credit increases every 6 months or so.

I think it depends on the lender, they're all different.

No_6

so are you using the new £13+K limit on the card ?
If not, it is a waste of time and will get you lower
limits on any new card you apply for.

Probably.... IMO

Windofchange

I have an extensive credit card history and I have never had any company decrease my credit card limit. I have had cards that I have run up to the max and I have had others that have just sat dormant as I have used them for 0% deals etc and then forgotten about them.

As an example, had an old Virgin card from 12 years or so ago that was maxed out at the 8k limit. I did a balance transfer on it to another card which I then paid off. Virgin got in touch about 5 years ago to remind me I still had the card and that my credit limit was unchanged. I think they had frozen the account but I could get them to unlock it with a phone call etc etc. I never did and just recently took out another Virgin card so they must have closed it by now.

My other main card I have just finished paying off. I use it from time to time for the odd thing - they have been increasing my credit limit pretty much every six months. Think it sits at 13.5k now.

I don't think in my n=1 example it matters what I spend. I have been a very good customer over the years. I think what will be more interesting for me is that as I pay down all my debt and hopefully get rid of it all this year, what will happen to my credit score. My credit utilisation ratio will drop to 0 and I will therefore be a bad customer for the credit cards. I no longer have a mobile phone contract, and so I will pretty much drop off the debt radar. Wonder if then I will get refused for credit - funny how it all works.

chattychappy

Windofchange wrote: »

I have an extensive credit card history and I have never had any company decrease my credit card limit. I have had cards that I have run up to the max and I have had others that have just sat dormant as I have used them for 0% deals etc and then forgotten about them.

My experience too. I also had a card that was otherwise dormant but for £17.92 a month (a continuous payment authority). The limit was around £12K (can't remember exactly). It was never reduced.

In the case of some dormant cards, they've written to me on expiry saying they'll close them unless I call to keep them open.

I've only heard of limit reductions when people seem stretched.