Card confusion!

Fireflyaway

I recently took out a Tesco credit card with a limit of £250. Its a card to rebuild credit as my rating is not great.
Then I applied for one via my bank and was accepted. I guess because my history with them is better. It has a limit of £1500.
My question is - shall I get rid of the Tesco one? My clear score shows the fact that the Tesco card has a low limit as a negative factor.
The purpose of all this is to improve my rating ready for a mortgage.

[Deleted User]

No. Keep both. It shows stability and a back up is always required.

Use one regularly and the other occasionally and clear both in full. Ignore the Clearscore advice.

Fireflyaway

Why do I need a 'back up'?

I see your point about stability. I guess the limit will probably increase if I run it well. Just wish I took out the Lloyd's one first then I wouldn't have bothered about the Tesco one.

[Deleted User]

For when the other gets declined. Or closed.

PeacefulWaters

Fireflyaway wrote: »

Why do I need a 'back up'?

When your biting something important and discover your bank's systems have crashed bringing on the substitute card saves embarrassment.

I see your point about stability. I guess the limit will probably increase if I run it well. Just wish I took out the Lloyd's one first then I wouldn't have bothered about the Tesco one.

Does your Tesco card give you Clubcard points? That might be worth using more often then.

eskbanker

PeacefulWaters wrote: »

When your biting something important

It could be needed anywhere, not just restaurants....

PeacefulWaters

eskbanker wrote: »

It could be needed anywhere, not just restaurants....

I can't even put that down to Apple!

Fireflyaway

Never thought of that! True, my bank went down the other day. I couldn't access anything so yes I could have used that credit card.
I think I do get Tesco points but I'm not planning on using it much.
Thanks guys.

System

I would personally ditch the Tesco one - assuming you have a card (debit or ATM) issued by someone other than the main bank.

A card with a £250 limit is fine if that's all you can get or you have issues controlling your spending.

The Tesco points as likely to worth pennies plus i'd hazard a guess it's got a high APR. Also, you are more likely to hit the credit limit and get charged £12.

takman

Heng_Leng wrote: »

I would personally ditch the Tesco one - assuming you have a card (debit or ATM) issued by someone other than the main bank.

A card with a £250 limit is fine if that's all you can get or you have issues controlling your spending.

The Tesco points as likely to worth pennies plus i'd hazard a guess it's got a high APR. Also, you are more likely to hit the credit limit and get charged £12.

Opening and closing a line of credit in a short period of time is not a good idea, especially when you want a good amount of history for a mortgage in the future.

Using the card each month for one lot of shopping will mean it never gets near to its limit and paying it off each month will mean the interest rate is irrelevant. This will build up some good history and they will also be able to get a credit limit increase if they want one.

System

takman wrote: »

Opening and closing a line of credit in a short period of time is not a good idea, especially when you want a good amount of history for a mortgage in the future.

Using the card each month for one lot of shopping will mean it never gets near to its limit and paying it off each month will mean the interest rate is irrelevant. This will build up some good history and they will also be able to get a credit limit increase if they want one.

Closing a single card (with a £250 limit) will make a negligible difference and will raise his/her average credit limit by about 50%.

The only exception is if the card issuer raises the limit quickly.

At 1 clubcard point for every whole £8, it's hardly worth the hassle for small spends.