Typical credit card limit in comparison to income

rookie91

Nebulous2 said:

My total credit limit on cards hasn't been under my salary in 20 years. At times it has been more than double.

Once some lenders trust you others tend to do the same. Back in the early 2000s, prior to the credit crunch, I received a £10k limit for about 6 applications in a row.  Then availability dried up and I stopped applying. Around 5 years ago credit suddenly became much easier again, with unsolicited limit increases. Now it is tightening again, and I can't see me applying for some time. 

Glad to hear that my plan isn't completely unrealistic. I do understand that due to the the current crisis, lending has tightened and I have a contingency in place which will enable me to pay off the debt by the time the 0% offer ends in 6 months if i can't get a sutiable balance transfer. I would prefer to roll the debt on and let inflation take care of it in 40yrs.

rookie91

ARH_2 said:

You've asked for more credit recently with one lender. I'd suggest that doing anything else should be avoided until you want to apply for that balance transfer in 6 months, otherwise that future lender will see it as third application for credit in six months, which could be more of an issue than credit utilisation. 

To answer your question, 56% of gross income across four cards. Different lenders clearly have different approaches, and their perception of disposable income (which can be used to repay) is likely crucial. 

I've only asked for more credit from one lender and no hard credit check will be made. Luckily my other credit limit has been in place for quite some time.

newdriver101

What you’re trying to do seems unnecesarily convoluted to me.  
If your current CC utilisation is 30% + you don’t need additional credit + you have no mortgage, rent, + no kids or other loans... then just throw all your spare cash at paying off your CC debt ASAP.  

I can see the temptation to focus on what your CC utilisation to income ratio will be in 6 months time in the hope that you will get additional credit for a balance transfer BUT your focus should be just on getting your actual debt down rather than focussing on utilisation etc....

As you have minimal outgoings, just pay-off all you can asap and re-assess your situation in 6 months time.  Even if there was a “good” rule of thumb for CC utilisation to income ratio - as others have said, these are such unusual times...  0% BT are few and far between since Corona - lenders are tightening or adjusting their criteria... there is no way to say if any will be available in 6 months time even if you meet the general criteria...

rookie91

newdriver101 said:

What you’re trying to do seems unnecesarily convoluted to me.  
If your current CC utilisation is 30% + you don’t need additional credit + you have no mortgage, rent, + no kids or other loans... then just throw all your spare cash at paying off your CC debt ASAP.  

I can see the temptation to focus on what your CC utilisation to income ratio will be in 6 months time in the hope that you will get additional credit for a balance transfer BUT your focus should be just on getting your actual debt down rather than focussing on utilisation etc....

As you have minimal outgoings, just pay-off all you can asap and re-assess your situation in 6 months time.  Even if there was a “good” rule of thumb for CC utilisation to income ratio - as others have said, these are such unusual times...  0% BT are few and far between since Corona - lenders are tightening or adjusting their criteria... there is no way to say if any will be available in 6 months time even if you meet the general criteria...

Tbh, throwing all my spare cash at it is my contingency. I'm confident that i can pay it off in full if required. However, if i can spread the repayments out without any additonal cost, I'd prefer that.  You're right though, I have overthought this but I didn't want to be caught out 2 weeks before the 0% offer was up.

Just to clarify, my credit utilisation is currently 72% and not 30%. That's why i'm trying to reduce it by increasing the credit limit.

Mrs_Ryan

Mines something like just over 10%. I have relatively low limits but I have credit elsewhere. OH’s is something like 20% of his income. 

Paully28

Mine is about 100% of my income, not including whatever limit they have put on my charge card. Depends on so much more than your income I have always assumed. 

femalemonarchfemalecanine

my total cc limit is over twice my gross income, currently

MattMattMattUK

I would not increase my credit limit at the moment, more debt is not an answer to anything, it is also going to be difficult to get.
For comparison I have two credit cards, one with a £12k limit, the other with a £10k limit, my income before Covid was six figures, but I also had the card with the £12k limit (started off at around £3k at 18 and went up every year or so) since my early twenties when I only earned around £20k pa and the £10k one (Gave me £10k straight away) I got when I earned about £60k. So at various points when the credit was given or increased around 50% of my gross income, it had fallen to around 15% of my gross income.

I do no think there was any logic behind it in the past, although now it seems that they are much tighter on their lending criteria.

Jakerrs

My limits are twice my gross income across about 8 or 9 cards at the moment, including two that I opened in the last 2 months which both gave me credit limits of 1/3 of my gross earnings (Amex and Sainsbury's). I think my utilisation must be about 1% currently

Jami74

Mine is about 35% of my gross income. Surprised me a bit because I only got my first card a few years ago (in my 40s) and use them for regular purchases. I have a balance on one with my bank at 0% but with the same bank have a higher balance in the savings account, they keep sending me messages saying I may be eligible to increase the balance, get a big loan or a mortgage.