Does lowering existing credit card limits help my score?

g_kendell

I have a couple of credit cards - one for my day-to-day spending (that gets cleared monthly) and two at 0% that I'm using to clear some debt. The 0% period is coming to an end on one of the cards shortly - so I'd like to move what's left on it to another 0% card.

My question is: should I reduce the credit limit on my other 0% card, closer to the outstanding balance, as I pay it off? On the one hand, I will have less available credit and therefore potential to run up higher debts and not meet payments, but on the other I will appear more "maxed out".

Obviously, I want to make myself as attractive to the lenders as possible, but can't find any guidance on the best way to go.

[Deleted User]

You don't have a score. But to improve your attractiveness to lenders, you need to consider not just your limits, but also your income and debts.

g_kendell

Thanks for the prompt reply.
My other debts are pretty static and I have a healthy income. However, when I last applied I got rejected by a credit card company because of "the amount of credit card debt was too high".

My natural inclination is to reduce the credit limits on the cards I have, but am trying to find out if that will impact on any applications I make for new cards - positively or negatively.

[Deleted User]

If you could give some figures, that would help. eg if you have 5k of debt with 10k of limits, I wouldn't go lowering any limits.

However, equally, if you have 50k of limit on a 20k income, that's not too good either.

Either way, don't lower limits continually/gradually - it could be interpreted as the lender managing you out.

g_kendell

The card I will be replacing and closing has a limit of £12,500 and will have a balance of about £4,600 to move. The other 0% card has a limit of £4,800 and will have a balance of about £4,200 - which will stay at 0% for another couple of years.

Geoff1963

If I understand credit ratings at all, they are a measure of how easily you could spend recklessly ; but don't. They are based on resisting temptation.

Asking to have your credit limits reduced, suggests you don't trust yourself ; and firms will pick up on that.