Credit limits?

Chaddee

Does anyone know how banks/companies decide credit limits? My HSBC card has a limit of £2k, even though I've never used it anywhere above £1k, and my recently applied for AMEX (the cashback one) I was astounded to see has a limit of £2800. I really don't need that much - I only wanted to use it for my monthly shopping (never more than about £200 at the moment) to get the cashback! If I ask them to lower it will it affect my credit rating? And how do they come up with these figures in the first place?!

inmypocketnottheirs

You can ask for the limit to be reduced.

Chaddee

But will doing so affect my credit rating?

mandalay_2

Hi there

This is my first post after reading lots of useful advice on here from others over the last few weeks. I wanted to let you know that asking for a lower limit will not affect your credit rating at all. I have been a mgr in banking. building soc for about 12 years and it can just be amended on their systems.

Spark

Except for Abbey. Abbey cannot decrease or increase the credit limit on their new Abbey/Santander card. I know, I've asked them twice to lower my credit limit, and they told me twice they couldn't do it.

The_Boss

Just to let you know that reducing my credit limits had an almost fatal impact on my ability to get credit.

If you have just two cards, it shouldnt matter too much, but I advise against reducing credit limits in case of you experiencing the problems I did.

taless

Hi Chaddee,

Different banks use different criteria for credit rating, hence it is hard to say if it will affect your credit rating.

Some banks pay attention to available credit limit - hence if you have too high a credit limit they might not like it.

Some look at your used credit - which in that case, your credit limits will not affect anything at all. Others look at your proportion of used credit over available credit - which in this the higher the credit limit the better (as the proportion will be smaller).

This is just me - personally if I am not taking up any loans/mortgages for the moment, I'll just hang on to the huge credit limit. And only when I'm near to the time when I'm applying for loans/mortgages that I will have a discussion with banks and see what they like.

Hope this helps!

CreditWhereItsDue

My new Halifax card says that a period of 6 months has to have elapsed before I can have my credit limit reviewed. Are there any scenarios or instances when a review can be prompted before 6 months, or is this final?