available credit a stumbling block?

virgin_moneysaver

if I have available credit on one card which I'm not using will it have an impact on applying for a new card & the limit I'll get?

card 1 - I have a limit of £7500 with a bal of £6000 which is coming to the end of its free period in Feb so I need to bal t/f

card 2 - I took this out for a purchases deal & the limit is £6500 but my bal is only £1500

if I apply for a new card to bt will the total of £6500 available to me but not using impact badly on my credit score - or should I ask card 2 to decrease my limit - but then it may look like I'm close to my limit on both cards & look desparate!! - I'm not sure how this credit score thingy works

thank you

jay78

In a word, yes. You have £14,000 of total credit with over half used. Now depending on your salary (which is?) a bank may decline an application if they feel you have too much available credit or give you a card with a very small limit.

virgin_moneysaver

thanx for the reply - so I am assuming card 2 will reduce my limit on request

Clariman

Hi

All lenders do take into account your available credit, so your existing credit limits could affect what another lender might lend you. However, I would say that this will depend on your salary and how good your credit history is generally. For example, if your salary is £50,000 and you have no missed/late payments, then I don't think that having £14K of available credit will make much difference. If your salary is less than £20K then bet is that it will make a difference.

However, you also raised a good point about "used" credit. Lenders also look at this as well as available credit so fixing one can damage the other. If you have a very good salary, I wouldn't reduce your current limits. If you think your salary may be borderline for these limits, then consider reduced card 2 to something like £4000 which would still give you some headroom.

Clariman

GeorgeUK

Just a thought - and it might depend on the banks involved, but could it be possible to clear the 1500 then ask them to change your account to a LOB or 0% BT one? (although you'd probably only get 6-9 months as an existing customer)