Using very small portion of large credit limit.

SlovakianGuy

Hi all.

Let's say you have a new CC with £5000 credit limit, but you only spend less than £50 on it every single month.

Is your CC issuer likely to reduce your credit limit after some time? I've read something about Halifax reducing credit limits of some customers to just £75 but don't know what was the reason for that.

mluton

My Halifax card was reduced to £75 then closed. All my other non used cards have been unaffected.

chelseablue

I've got a Barclaycard that I've had for 13 years, credit limit is £12,000. 
If I use it I pay off in full, some months it might be just £20. They've never reduced my limit or ever contacted me about usage. 

SlovakianGuy

Thanks guys. So it seems like only Halifax do that...

I wonder if there's any reason for that. Something that Halifax CC holders forgot to mention here on the forum, such as using their cards for gambling transactions or being late with their payments, etc.? Or do they use their cards responsibly, yet Halifax decided to reduce their limits to £75 ?

[Deleted User]

It;s not just Halifax. It's a simply a different approach to unused available credit.  Halifax have done well on acquisition since the launch of Clarity, but need to ensure that the total credit funding is working hard enough.  Their policy has shifted - and will continue to shift - over time.

SlovakianGuy

OK, so what would you recommend if I want to have multiple credit cards but don't want my limit reduced on any of them. Just spend a larger amount at least once or twice a year on each card?

[Deleted User]

Yes, but only if you're spending that anyway.

I wouldn't over think it.  As long as you have three or four cards, you're not going to run into trouble.  Just use them all from time to time.

born_again

mluton said:

My Halifax card was reduced to £75 then closed. All my other non used cards have been unaffected.

Yet I have £9.5K on mine and other than a sub £1K balance transfer at moment, often have a zero balance. Has never been reduced in the 10+ years I've had it.

Ergates

SlovakianGuy said:

So it seems like only Halifax do that...

I have a Halifax CC that I've had for... nearly 20 years now, with a limit of £11,000, that has never had more than a few hundred on at any one time.  

northwalesd

My other half has a Halifax card with a limit of £15,000, rarely uses it (probably the once a year I prompt him to do so, just so it does get some use). Not a peep out of Halifax.

Fingerbobs

I've had a Halifax card with a £9.8k limit for many years, which is virtually never used. Maybe 2 or 3 transactions per year tops. Never had a limit reduction.