Should I cancel hardly-used Capital One card

Pound-Of-Flesh

Hi
I am trying to figure out what is the best way to get a large credit limit when I apply for a new credit card.

I have various cards that I acquired about 10 yrs ago, when the lenders seemed very keen to issue them with high limits. (I was self-employed & earning quite a lot at the time, which helped obviously)

I have a few cards with small limits but the main three are -
Barclaycard, Capital One & Virgin. All of these have limits of £10k - £20.

On Barclaycard & Virgin I have pretty hefty balances at 0% ending soon.
Over the years they have repeatedly given me more 0% offers, so I have been able to shuffle the balances back and forth.

The Cap One card has had a balance of zero for many years - EXCEPT I use it each month to pay for petrol etc and pay it all off. I hoped this would keep it "active" and they would make another 0% offer. This has NOT happened for many many years.

I phoned them today and asked for a 0% BT. They said they can't do that on the current card. But I could try applying for a new card on their website. I tried this but it rejected me.

I have used the MSE Credit Club system. It says I have an excellent rating (996).
In terms of Affordability it says my Debt Ratio is "Good".
But my Credit Utilisation is "Fair". This seems to be the ratio of actual borrowing on my existing cards to total credit available on those cards.
This is what it says -
"Lenders ... like to see you have existing credit available to you, that you’re managing well...
As a rule of thumb, a credit utilisation below 60% is often seen by lenders as a positive. Anything above starts to turn them off."

This implies it would be a Good Thing to keep the Cap One card, because it keeps my utilisation ratio down.
BUT I have always been under the impression that lenders calculate a ceiling on what they think your total credit should be. This line of reasoning implies I should cancel the old card to improve the chance of an extra £10k credit on a new card.
Which is right??? Cancel or keep the Cap One?

Also FYI, Credit Club says I have been "100% pre-approved" for a new Virgin card. [I think this is possible because the one I have is actually MBNA] I clicked through the "apply" button to get more info (but did not actually complete the application process).
There is a box with a representative APR it says -
"based on borrowing £1200. Credit limits will vary based on your individual circumstances."
Does anyone know if this always say £1200?
Or is that the limit it has calculated they would give ME?

Thanks

[Deleted User]

I'd leave it if you only have three cards and especially as you are carrying balances.

£1200 is a regulatory requirement to illustrate the APR.

Candyapple

The best way to get a large credit limit is a combination of the following: make sure you pay all your bills on time, no late payment markers/defaults or CCJs, a relatively low debt to credit utilisation, little to no hard searches, address stability (been on electoral roll a long time), high income, other accounts held/managed for a long period of time.

I would close the Cap One card as it seems it may be eating up your potential to gain a high limit elsewhere.

If you’ve been pre-approved for a Virgin card then just apply for it and assuming you haven’t lied on your application, there should be no reason why you aren’t accepted. Of course your limit will be dependent on how much debt you are carrying and your income amongst other things, but the £1200 is just that, a representative example. It has no bearing on what limit you will get.

Pound-Of-Flesh

Thanks for the info that £1200 is a standard representative example - I was unaware of that.

Candyapple - I fit the profile of a good risk: never miss a payment, same address for 20 yrs etc.
BUT you have said both -
a) "relatively low debt to credit utilisation"
b) "close the Cap One card as it seems it may be eating up your potential to gain a high limit elsewhere"

This is my dilemma - keeping the card fulfils (a), cancelling it fulfils (b)!!!

Does anyone have any specific experience of how Virgin calculate credit limits?

Pound-Of-Flesh

I just looked at my cc utilisation again -
I am using 65% of my available credit (just slightly over the 60% mentioned by Credit Club as the maximum desirable).
If I get rid of the Cap One card my utilisation will jump to 77%

WillyWonga

With any card company its a lottery as to what credit limit you would get. I have had a Capital One card for 10 years plus and no offers. Told to apply for another Cap 1 card etc etc. Went to Virgin and got 0% card with £4100 limit after being at address for 3 months (on elec roll and prev addresses elec roll). I wanted to transfer a largish balance so applied week after Virgin and on same details got £6500 on 0% MBNA.

Candyapple

Pound-Of-Flesh wrote: »

Thanks for the info that £1200 is a standard representative example - I was unaware of that.

Candyapple - I fit the profile of a good risk: never miss a payment, same address for 20 yrs etc.
BUT you have said both -
a) "relatively low debt to credit utilisation"
b) "close the Cap One card as it seems it may be eating up your potential to gain a high limit elsewhere"

This is my dilemma - keeping the card fulfils (a), cancelling it fulfils (b)!!!

Does anyone have any specific experience of how Virgin calculate credit limits?

If you've already been given 100% pre-approval for a Virgin card then just apply for it. You can always apply to increase your limit in 6 months time if it's not enough. Once you get the card, then cancel your Cap One card because it will take about 2-3 months to filter through on your credit files that the account is closed.

Virgin are known for giving high limits. No one here knows how card companies calculate how much your limit will be - that is done by complex algorithms by whatever data the company views as valuable.

As a side note, when you do your balance transfer shuffle, you might want to think about starting to pay off more than the minimum each month to make headway into clearing your debts rather than relying on future balance transfer deals to still exist when it comes near to the end of a 0% period.

http://www.whatsthecost.com/snowball.aspx

System

Another thing to be aware is that Capital One are mostly sub-prime these days and may simply not want someone of your profile.

They simply don't think they'll make any money from you.

Pound-Of-Flesh

Thanks for the useful replies.
I just went ahead and applied for the Virgin card. My thinking was: If utilisation is specifically mentioned by Credit Club, there must be a good reason. This was the weakest aspect of my profile. If I cancelled the Cap One card I would make it weaker in that regards - so it would be silly to do so.
I got a credit limit from Virgin in excess of £10k!