Is it best that I decline a credit increase?

someboody

Hi guys,

I have 2 credit cards:

• Barclaycard - 94% utilised (roughly £4,700 of £5k limit)
• Tesco Credit Card - 95% utilised (roughly £1150 of £1200 limit)

In the last 2 weeks I coincidentally received letters from both credit card providers saying they're increasing my limit without asking for it.

• Barclaycard - increasing from £5k to £6.5k
• Tesco - £1200 to £3200 (almost tripling my limit)

I was looking to shift my Barclaycard balance onto a new credit card by applying for a 0% balance transfer card.

As I had the intention of applying for a balance transfer credit card to shift my existing debt, and in a mode of panic, I declined Tesco's offer of an increased limit. It was my thinking that having a high level of available credit would mean that I would have a low chance of getting a decent amount of credit when I apply for a balance transfer card.

However, I've now read that having a low utilisation rate can in fact boost your credit score, so by declining the increases from my existing card providers, I've reduced my chances of getting a higher credit limit when applying for a balance transfer card?

I'm now confused and would be grateful for any advice in order to maximise my chances of getting a good balance transfer limit when I apply for one.

Thank you

Edit: I'm not really in need of an increased limit, I just want to transfer my balance to a 0% to clear it off sooner. I've always payed at least the minimum amount on time. Never missed a payment.

[Deleted User]

Forget your score - it's not a real number.

Those are low limits anyway in the scheme of things, so accepting them would have done no harm, and it shows the lender/s in question trust you.

If you're looking to BT some away, use an Eligibility Checker to see what you can qualify for, though you won't find out what limit you will get until you apply and are accepted for the card.

Craig1981

i would suggest you take the limit increases, but do not use them.

having a total utilisation of 94% is extremely high, even though total amount owing is not

taking the increases would reduce utilisation to 60%, a lot better than it currently is, which will be more attractive to other lenders

getting a new BT card, without further spending, will decrease this amount again

do some eligibility checks, whether it with Money Club, CLearscore, Noddle... this will provide an indication of what you could expect, rates, terms etc

[Deleted User]

!!! wrote: »

If you're looking to BT some away, use an Eligibility Checker to see what you can qualify for, though you won't find out what limit you will get until you apply and are accepted for the card.

This is a big problem with all eligibility checkers - that you're not told what credit limit you'll be given. What's the point of being told that this lender or that lender will give you a card, and once a hard check is entered on your credit file, you find out that the credit limit they give you is of no practical use.

I think it's totally pointless to use a checker when you're not given all the information to make an informed decision - ie to proceed or decline the offer before any hard searches are made which would be equally as detrimental to your credit file.

[Deleted User]

It's not a big problem - what did you do before the days of eligibility checkers?

Answer: you applied and were told the limit etc. at the time of application following a heard search, if you were indeed successful.

The purpose of an Eligibility Checker is that a soft search is performed to determine your "eligibility" for a card, to then proceed with a full application and hard search to determine your limit allocated etc.

[Deleted User]

!!! wrote: »

It's not a big problem - what did you do before the days of eligibility checkers?

Answer: you applied and were told the limit etc. at the time of application following a heard search, if you were indeed successful.

The purpose of an Eligibility Checker is that a soft search is performed to determine your "eligibility" for a card, to then proceed with a full application and hard search to determine your limit allocated etc.

Yes - that's all fine and I accept what you say. But don't you think that an eligibility checker would be a far better tool if it told consumers what credit limit they would get if they decide to apply? As it stands, it does not give consumers all the required info for them to make an informed decision, and they could still end up with a card which they would not have wanted.

System

[quote=[Deleted User];75073559]Yes - that's all fine and I accept what you say. But don't you think that an eligibility checker would be a far better tool if it told consumers what credit limit they would get if they decide to apply? [/QUOTE]

But it can't though because unless you're using one on the card's own website a third party eligibility checker does not have access to the same internal scoring algorithm the credit card company uses so not only can it not tell you what the limit would be, it can't even guarantee 100% that you'd be excepted. Third party eligibility checkers do nothing more than take a best guess.

[Deleted User]

[quote=[Deleted User];75073559]Yes - that's all fine and I accept what you say. But don't you think that an eligibility checker would be a far better tool if it told consumers what credit limit they would get if they decide to apply? As it stands, it does not give consumers all the required info for them to make an informed decision, and they could still end up with a card which they would not have wanted.[/QUOTE]

Not without running a hard search no - in which case you might as well just apply for the card outright and hope for the best,