Credit card limit increase - good or bad?

sliss

Hi, hope someone can shed some light as getting conflicting info from google!

I have a 0% credit card that was obtained and used for paying for the big items on our honeymoon earlier this year - flights, hotels etc

The card is 0% until next November so we calculate our monthly payments to clear the balance by then. (We do have savings that could now clear the card but as it is 0% we do not see much point!)

Anyway... the current balance in that card is just over £2500 the credit limit is £5500. This week I received a letter from the card company that says that they are increasing the credit limit on the card by another £2000 and that if I do not want the increase then I can opt out and leave it as it is currently.

The increased limit is not needed as there are no more purchases going on the card and after we have paid the card off we will cancel it.

The question is will the increased limit help or hinder my credit file?

We are just going through the process of moving house so with mortgage applications on the horizon I do not want to impact my credit score negatively.

Any info appreciated

[Deleted User]

You have no credit score - just credit history.

A larger limit shows you are more trusted by lenders. It only becomes a problem if you have very large limits in comparison to your income.

Dobbibill

The increase will alter your credit card utilisation, making it lower overall.

They normally give you notice of an increase - is this likely to be before/after mortgage?

If it's your only line of credit, it shouldn't hinder anything but it's all a balancing act.

System

If you abuse it its bad, if you don't then a higher limit with the same normal usage shows a low credit utilisation which is good.

Lenders don't use CRA credit scores so don't worry about it. There have been plenty of posts from people with scores of 900+ on Equifax saying they can't get a mortgage. Focus on what the positives and negatives in the file are.

HeCh

Deleted_User wrote: »

It only becomes a problem if you have very large limits in comparison to your income.

ZX81: What would you say is generally considered to be very large?

>25%, >50%, >75% gross salary ?

Is there a rule of thumb with this?

Thanks

sliss

Thanks for the replies so far. The notice of increase is 30 days so is likely to be before our mortgage application.

It sounds like it is a potential good thing then, as I have said the credit card is not used for any further purchases so won't be utilising the additional credit.

I do have another cc which I only use for fuel and pay off in full each month. The limit on this card is quite a bit less than this one however.