credit utilization question

[Deleted User]

Credit utilisation is a CRA thing used to sell you score improvement products.

If you’re clearing balances in full each month, which you should be unless you’re in a promo, then credit utilisation doesn’t matter.

OceanSound

Since starting this thread I've learnt that Barclaycard start out with pretty low credit limits. This could be the reason why they offered me such a low limit.

[Deleted User]

What’s a “low limit”?

C.M.

I’m not sure that it’s true that Barclay card start out on low credit limits - my first limit on my Barclaycard was in excess of £6k - with a lower salary and higher debt than you.

I do have lower credit utilisation though; both on average and across individual cards

OceanSound

Try this thread (on this site): https://forums.moneysavingexpert.com/discussion/5229207/barclaycard-platinum-unusually-low-credit-limit#1

Hey guys, I'm relatively new to the Credit Card scene so was wanting to ask some advice on a weird credit limit I got from BarclayCard.

I recently got my first BarclayCard and was expecting quite a decent limit on it (as I was planning to use their 12 month 0% offer to buffer the hit of buying a new car, rather than forking out the whole sum at once). I've never been in any bad debt, never missed a payment on anything, I'm 24, live in London and my annual base salary is £75,000. I used to have an Amex Gold charge card which I put about £10,000 on over the past year and paid off via Direct Debit every month and I now have an Amex British Airways Credit Card which they gave me a £7,900 limit on right from the start (unfortunately, that doesn't have any 0% offers, hence me wanting the BarclayCard)... So naturally I was expecting around an £8,000 limit for the BarclayCard... yet the limit that I got with it : £400!

Now this seems ridiculously low! Maybe something I'd expect if this was an initial card, or for someone who's had a history of defaulting and missing payments, but not for my situation?! Has anyone else had this experience/can shed light on why that's so low??

[Deleted User]

Barclaycard tend to be one of the more generous lenders in terms of limits.

Terry_Towelling

Lenders know that a 0%-on-purchases-card appeals mainly to two types of borrower - those who are stoozing (which may be evident from their credit history and who will never be profitable) and those who perhaps have no alternative but to carry a balance from month to month (which may also be evident from their credit files but who may eventually become profitable).

So the lender may have to fund your unprofitable borrowing for as long as the promotional period lasts and never get you to pay any interest. It therefore makes sense for them to offer a low limit so the cost to them of your interest-free borrowing is kept to a minimum until they can be more certain what type of borrower you are.

As you move through the promotional period, they will judge when to increase the limit in the hope you are not a stoozer and will borrow more and eventually start paying interest.

Raising your limit later on in the promotional period so that you borrow more may increase your total credit availability and utilisation. Those factors can make you less desirable to other lenders and decrease the possibility of you obtaining another promotional offer large enough to transfer your whole debt away.

SnowTiger

OceanSound wrote: »

Seems the above money.co.uk webpage has been updated in January 2019, so the above doesn't appear in the article anymore.
Here's the link to the article (pre-update):
https://web.archive.org/web/20170711043354/https://www.money.co.uk/credit-cards/how-do-credit-card-limits-work.htm

People can write whatever they like and stick it up on the Internet. What they write might be right or wrong.

In September 2018 you had a total credit card limit of £16,700 with a total outstanding balance of £9,470.

Since then you've applied for (at last) two other credit cards, then recently asked if you should accept a credit limit increase from £450 to £1,700.

What's your goal? What's the endgame? What are you trying to achieve?

The fact you're getting lower limits on your most recent cards suggests you may be reaching your peak.

OceanSound

SnowTiger wrote: »

People can write whatever they like and stick it up on the Internet. What they write might be right or wrong.

In September 2018 you had a total credit card limit of £16,700 with a total outstanding balance of £9,470.

Since then you've applied for (at last) two other credit cards, then recently asked if you should accept a credit limit increase from £450 to £1,700.

What's your goal? What's the endgame? What are you trying to achieve?

The fact you're getting lower limits on your most recent cards suggests you may be reaching your peak.

You've clearly done your homework. IT's quite refreshing in a sense.

People can write whatever they like and stick it up on the Internet. What they write might be right or wrong.

I would tend to agree. However, we are not talking about something published on davesveryownwebsite.com. The info I meantioned was published on the site https://www.money.co.uk, who are authorised and regulated by the FCA.

Rather than asking me what my goals/end-game is perhaps you should be asking https://www.money.co.uk what their goals/end-game was in removing the info that was there before. Was it due to changes to law/regulation, too many people calling the support lines to decrease their credit limit (doubt it!), something else?

The fact you're getting lower limits on your most recent cards suggests you may be reaching your peak.

I applied successfully to CapitalOne and received a £1500 limit after the dismal £400 Barclaycard limit. FACT!

[Deleted User]

£1500 is still a low limit.
Even £10,000 is a low limit

As already asked above - what's your end-goal here with applying for multiple credit products whilst still carrying debt elsewhere?