Credit card limits / re mortgage

carlsagen

Hi. Im currently looking to remortgage and have had advice in the past about credit cards being a good thing but more recently that a high limit credit card can pose a risk to another lender when looking at what they may be exposed to.

I want to make the right steps card wise before I start looking at a remortgage. The remortgage is to reduce my term without more borrowing.

I have 3 credit cards.
2x Barclaycard £4800 limit with zero balance and a £14,700 Limit with zero balance. One of these is tied to my xbox account so usually has a £30 monthly spend now and then.

1x Lloyds Mastercard £11,800 Limit zero balance. I use this for the odd internet purchase.

All cards are paid off every month. I don't have any other debts. Ive just accepted the limit increases as and when they have sent them.

I use clearscore credit check and my score has been stable at 515 out of 700.

My question is should I get rid of some cards? reduce the limit or keep them. Im not sure whats best to do.

[Deleted User]

I'd keep all three. Don't worry about the pretend credit score.

It's wise to have at least a couple of back ups. You may also want an additional one for forex if you spend overseas, if your existing cards don't offer that.

TheShape

carlsagen wrote: »

I want to make the right steps card wise before I start looking at a remortgage. The remortgage is to reduce my term without more borrowing.

What do you gain by remortgaging to reduce your term?

By doing this you'll presumably increase your monthly payment and would still be tied to this monthly payment even if your income was reduced, eg through job loss, sickness etc.

You could possibly achieve the same goal of reducing your mortgage term by overpaying each month and retain the flexibility of returning to your current lower payments if ever necessary.

Terry_Towelling

What is your mortgage rate?

If you want to reduce your mortgage term but retain the flexibility of still keeping hold of your cash in case of emergency, you might be able to take the extra money that you'd be ploughing monthly into your mortgage and save it at a higher rate (or possibly invest it - but that carries more risk of loss). You could then consider making lump sum payments off your mortgage periodically, or just keep saving/investing until you felt the urge to pay it off your mortgage.

Doing things this way, or as TheShape suggests, will allow you that little bit of extra flexibility and security in the event of job loss, illness etc. Much depends on your mortgage rate, though, and whether re-mortgaging would give you any other advantages such as a significantly lower interest rate.

carlsagen

TheShape wrote: »

What do you gain by remortgaging to reduce your term?

By doing this you'll presumably increase your monthly payment and would still be tied to this monthly payment even if your income was reduced, eg through job loss, sickness etc.

You could possibly achieve the same goal of reducing your mortgage term by overpaying each month and retain the flexibility of returning to your current lower payments if ever necessary.

Actually, I’d not thought of it like that. I just thought if I could get the term down the all the better. It’s a mental thing. I do over pay now. My term has a couple more months to run. The rate is 1.54%