Does it matter how much you spend?

MarkFromCornwall

DarrenW80 wrote: »

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?

I have several cards like this which I only 'exercise' once a month by buying a cup of coffee and have never had the account closed or the credit limit reduced.

Shakin_Steve

I believe that CC companies have to contact you now to ask if you agree to them raising the limit. I know our MBNA card shot up from £3000 to £13000 in about 18 months, but that was about five years ago. Any increase I've had on other cards recently have been preceded by a letter or email, requiring me to ring up and press a few buttons.
Unless you are an absolute exception to the rule, surely most people don't spend £000's every month and settle in full? Apart from money transfers, at about 4% in fees, I've never actually 'spent' more than a grand.

Anthorn

DarrenW80 wrote: »

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?

On the first point, spending £20 per month and then clearing the statement balance every month: More likely to affect other card applications either positively or negatively depending on the lender. If you do the same every month you will be creating a pattern on your credit history which will be applied to the future. In addition if the £20 is below the minimum payment, if you like the minimum minimum payment, that £20 will be the minimum payment which will add the minimum payment flag on your credit history similarly creating a pattern if it's done regularly.

On the second point, would you get a limit increase if you are only spending £20 per month on a card (with £5000 limit): Again depends on the lender and personally I've been unable to calculate the algorithm used in determining limit increases. Overall, lenders look at how you're managing the account and what proportion of the limit you use and related to your income whether you can afford to keep up the payments if the limit was increased. But don't quote me on that: Vanquis for example increased my credit limit when I had not used the card for 6 months!

theburningcat

I can't see them offering you a limit increase if you spend a tiny % of your limit every month. It makes no sense. My wife has a £2300 limit with Santander and for the first year or so put < £100/month on it. A few months ago, she lost her debit card and instead of ordering a new one, she started to use her credit card instead. She now puts ~ £900/month on it, and has done for another year or so. Still no increase.

Nasqueron

I've had a bank CC for about 17 years, they have never lowered the balance despite my spending being much lower than the limit, in fact they kept upping it. I lowered it voluntarily to try and get a better BT card limit by reducing my overall credit. I had a supermarket CC as well and lowered that, after 18 months or so they upped the limit for me (I rejected it). Even on the reduced balances the card never have more than abut 25% of credit limit spent, paid off in full every month and it's usually lower

KILL_BILL

it varies from provider to provider

i had a second barclaycard and was given a low limit of £300.00 and then i got a letter stating that they where increasing my limit to £1800.00 out of the blue after i had the aco!!!! for a bout 12 months. i had used about £200 limit of the card.

Sometimes the increase limits to get people to spend more though