How many credit cards is too many?

[Deleted User]

It very much depends on who you apply to. Certainly all lenders I've worked with will factor in available credit to an extent - and some to a very large extent.

It's one factor amongst many, but it's certainly capable of having a decisioning impact.

[Deleted User]

Again with the utilisation myth.

Whether you are using the available credit or not, you have that credit available to you to potentially use therefore it is taken into account.

[Deleted User]

DigitalDevil wrote: »

I was always under the impression that it was based on total amount of available issued credit.

So if I’ve got £50k available across 4 cards it doesn’t matter if they are maxed out or not when I apply for new credit as they would need to take into consideration the total affordability of my total available credit as I could very much go out the day after securing the new credit and spend that existing £50k I already had available....

Guess I’ve had it wrong all these years.

That’s is how it’s viewed and you’re not wrong.
So don’t worry.

[Deleted User]

kezzygirl wrote: »

The interest rate on foreign spending for the virgin card is something ridiculous like 20% apr, we are hiring a car so didn't want to use our prepaid caxton card nor cash, as we wanted the protection of a credit card. We plan on paying for it and transferring the money to pay it off straight away. We currently aren't paying interest on any of the cards as they are all 0%, we are paying enough monthly to ensure they are cleared by the time the promotional rate expires. Unfortunately this has meant we have various cards which have balances but no current usage. As some are cleared I didn't know if it would be best to close them

If any of the cards are from the same banking group you could ask if they will consolidate the limits onto one card.

Candyapple

beany_bot wrote: »

This doesn't happen.
Unused limits are in no way negative. In fact, the more credit available to you that you aren't relying on, the better.

Sorry, you are wrong. A lender most definitely will take into consideration exactly how much total credit is available to you. As to how much that factor is weighed into the risk assessment, is down to each individual lender’s algorithm.

As an example, if you had say 7 credit cards with £10k limit on each, all with zero balances, and you applied for a new card with another lender, that lender would also assess the risk as this person has £70k available to them at their disposal. They could tomorrow go out and blow it on whatever and default and never pay a penny back. Do we offer them a new card but with a limit of say £1k to reduce our exposure or do we decline them altogether as too risky to fit our customer profile? So to say it has no bearing and gather as much credit as you can without affecting you is naive at best.