Decrease credit limit

Fenja

Hi there can anyone please tell me if there would be a negative impact on my credit score if I requested that the credit card limit on my new card be decreased ? (I feel safer having a smaller limit) as I had heard that requesting my limit to be reduced is not advisable for that reason ? Thank you

cymruchris

The answer will depend on a few factors. Will you be wanting to apply for a large financial purchase over the next couple of years? Or a mortgage? If so, it's better to have larger limits.

If you plan to use only this credit card, and not take out any big purchases - then you can set the limit to whatever you like.

Future lenders will look at how many accounts you have, their limits, and how you've managed them to help them make an informed decision. If you've set your limit at £250 - it'll look like lenders don't trust you that much. If you have a limit of £10k - that would be looked at far more favourably (assuming you hadn't spent the 10k and were running the card at its limit).

What makes you feel safer with a lower limit? Is it because you want to prevent yourself from spending too much? Or afraid the card will be compromised fraudulently?

Fenja

Thank you for that info...yes it is just to protect against fraud as I don't feel comfortable having a high limit. I read a couple of things  online recently saying  that it could have this negative impact on my credit score if I requested a lower limit (but these were us sites) . I don't anticipate making any expensive purchases in the near future .

Fenja

Thank you for taking the time to reply it is much appreciated.

[Deleted User]

It won't protect against fraud, as the money is the card company's rather than yours, so it has no impact on you, whether it's a pound or twenty grand.

Reducing your limits can be interpreted by other lenders as you being seen as higher risk by your card provider.  If you trust yourself, I would leave it as it is.

cymruchris

Then if you don't see the need for a large credit purchase over the next couple of years - you can set the limit to whatever you want (Subject to the card providers agreement). The scores aren't important. The data is what's important. Nobody sees the score apart from you. Having an account that's paid on time regularly with no missed/late payments is far better than looking at any score. The magic score may go down when you amend the limit - but will slowly recover over time. These days though with the apps available - and the ease of checking balances regularly - fraud is less of an issue.

Assuming you only buy from well-known websites - the chances of fraud are slim. If you use your card responsibly, it's very, very unlikely you would ever be held accountable for any fraudulent activity on your account. Some card providers also provide the option to 'Freeze' your card that you can keep turned on via the app - and then 'Unfreeze' when you want to use it. Are you talking about an account you already have?  or one that you are about to apply for? I wouldn't really worry about having a higher limit though. It's only if you were ordering lots of things of less reputable sites might I worry.