How can I maximise chance that new credit limit will match old? 17 May at 6:48PM in Stoozing: Free Cash from Credit Cards 3 replies 111 views

cbmaxyz

I recently took out a 0% credit card from Virgin Money, and was given what I think is a very generous credit limit.  When the 20 month period is over, I anticipate I'll be at or near this limit and will want to transfer the whole balance to another 0% card.  But it's struck me that, for a brief period, this involves having two cards with high credit limits: the Virgin card, and the hypothetical new one that I'll be transferring to.  Now *I* know that after the transfer I'd be closing my Virgin card rather than racking up new debt, but the new company won't know that... so I'm concerned I won't get a new card with such a high credit limit - or perhaps no new card at all, given how high the Virgin credit limit is.  Is there any way to quantify and/or mitigate this risk?

I figure one way might be to reduce the limit on my Virgin card - either now or later in the term, based on this forum's advice - in the hope that the new company will get closer to matching it.  For instance, consider two scenarios (with made-up figures):

Virgin £2,000 limit

new card £1,000 limit

Virgin £1,500 limit

new card £1,500 limit

In both cases, my total credit adds up to £3,000.  But in the first case I could only do a balance transfer of £1,000, whereas in the second case I could transfer £1,500.

However, I know it's not as simple as "new card limit + old card limit = £3k", so I thought I'd ask here for any better rules of thumb or things I can do in the run-up to the end of the 0% period.

eskbanker

cbmaxyz said:

I recently took out a 0% credit card from Virgin Money, and was given what I think is a very generous credit limit.  When the 20 month period is over, I anticipate I'll be at or near this limit and will want to transfer the whole balance to another 0% card.

Are you stoozing, as implied by your choice of posting location?  In other words, is this 'real' debt that would cause issues if you weren't able to move it to another 0% card, or would you simply be able to pay it off?

Given current circumstances, I wouldn't like to guess what the 0% card market will look like by the end of next year but wouldn't want to have to rely on securing a generous deal then if avoidable....

cbmaxyz

eskbanker said:

Are you stoozing, as implied by your choice of posting location?  In other words, is this 'real' debt that would cause issues if you weren't able to move it to another 0% card, or would you simply be able to pay it off?

Yes, I am stoozing and could just pay it off.  It's been a few years since I've stoozed, but I'd like to get back in the game!
That said, I'd much rather not pay it off because doing so will either involve delaying some home renovations (planned for 2021) or withdrawing from fixed-rate accounts with penalties.

eskbanker

cbmaxyz said:

eskbanker said:

Are you stoozing, as implied by your choice of posting location?  In other words, is this 'real' debt that would cause issues if you weren't able to move it to another 0% card, or would you simply be able to pay it off?

Yes, I am stoozing and could just pay it off.  It's been a few years since I've stoozed, but I'd like to get back in the game!
That said, I'd much rather not pay it off because doing so will either involve delaying some home renovations (planned for 2021) or withdrawing from fixed-rate accounts with penalties.

I'd have thought that the stoozing landscape is much less appealing now in this ultra-low interest rate environment but each to their own!

Anyway, in terms of your main question, I'm not convinced there's any one-size-fits-all advice as to how to game the system by manipulating limits, etc, and in fact it's often expressed that lowering limits looks negative to prospective lenders, who can't tell whether this is at the lender's or borrower's instigation.  I'd suggest reviewing this in a year's time (i.e. with more than six months to run) and see what sort of state the economy is in, and how this is being reflected by lenders....