Maximising Credit Card limits

nicholbb

I just got accepted for a Virgin money 0% card. Putting all spending on it will hit the limit in about 1 year (1/2 way through the deal).
I have an Amex which I've reduced by £5k (not sure if relevant).

What's the best strategy to continue the credit past the year? Especially interested in timing of when to apply.

1) As I'll be paying the minimum only, would I be likely to get the credit increased? If so when best to apply?
2) Should I apply for another 0% card to continue the spending, or look at a BT one (if so when)?
3) Is there a rule of thumb around what limit you can get, like a mortgage? As it seems a complete black box.

The cash will be going to an offset, so have about 5 years to play before I cash out but means it's liquid.

Thank you for any help or advice.

bd10

Hi,

so if I get this right, you'd be locking away your regular expenditure as regular savings into a product with a 5-year term?
If so, what interest rate are you expecting to get there? Is it subject to early withdrawal penalties/fees?

If you already have an Amex card, the following game would seem more attractive to me:
(a) open an interest-bearing current account, such as Nationwide's Flexdirect. It pays 5% in the first year for balances up to 2,500.
(b) Run all regular spending through your Amex card. Get cashback or reward points, anywhere between 0.5% to 1.25% depending on card.
(c) Pay Amex balance off in full each month.

That way you'd be getting 5.5%-6.25% p.a. back in year 1. The downside? Nationwide's 5% is only valid for 1 year but you would not be accumulating any debt, nor would you have to worry whether another suitable zero percent offer may or may not be around after year 1.
Now, Marcus kicked off competition in the instant savings account market and other are now also paying 1.5% p.a. So, come next year, you could park your cash offset there, still getting 2%-2.75% combined with the card.

Just my 2c worth.

nicholbb

Hi,
Thank you, you've given me something to think about. My post lacked some vital info but you still managed to help.

The product is a 5 year fixed offset mortgage, interest rate 2.13%. Money spent would go into the offset rather than paying the card off monthly (as I currently do), I could pay the card back if need be at the end of the term.

Regarding the bank account and using the AMEX, that's a kick I needed. It's essentially what I've been doing but with Santander (a worse rate and no longer need the benefits). So will look at Nationwide and put the max in.

Doing simple calculations (which I hadn't before), I think the 0% card works out better.
This year AMEX spending was £11,657, with £87 rewards and cashback (0.75% rate as it happens).
Using the 0% card from £0, after 10 Months I'll have earned more than the AMEX would for the year.
Even if I can't get another card (so go back to the AMEX) at £12k, I'll be saving £21 a month of interest for the remaining 16 Months.

This is why I want to maximise this type of debt for 5 years (then I'd cash out in order to get a better rate on the mortgage).