How much credit is too much?

Woodstock23

Hi all – I’m a long-time reader of the forums, but this is my first post! I’m looking for some advice about whether or not to close one or more of my credit card accounts.

Over time, I’ve built up to having four cards ; details and credit limits noted below. Gradually over the years the credit limits for some of them have been increased and it now seems to be a lot of credit to have available. I’m not worried about managing it; I’ve used my cards over the years, but never been in difficulty or missed a payment, and utilised 0% balance transfers to manage payment for larger single purchases.

I currently have just over £800 on one of the cards which is at 0% and will be paid off by June, and £120 incurred this month on another which I’ll pay at the statement date.

I suppose what I’m asking is there a downside to having too much credit available from a provider’s perspective?

If it makes any difference, I have a mortgage of around £120k with about 75k equity in the property but no intention of moving anytime soon, and an annual salary of around £45k. My salary fluctuates slightly as I work on fixed term contracts due to the nature of my industry, but have been continuously employed for over 10 years so it’s not unstable thankfully. 

Cards & credit limits

RBS £1,500
Sainsbury’s £7,500
M&S £6,500
Barclaycard £10,200

[Deleted User]

Your credit limits are fine, just keep using them and paying off in full, if you needed to move in the future just ensure you don't have any debt hanging over on the cards

Sandtree

If you apply for new credit in the future the lender has to consider affordability which includes the scenario of you maxing out all your existing lines of credit and hence large unused credit can count against you however lenders also like to see others are trusting you with high limits and so its actually a finely balanced thing and factors other things like salary and history in.

yksi

You have no intention of moving anytime soon. You didn't mention any need for obtaining a large amount of credit, for example you're buying a new Audi or extending your home, or wanting to refinance your mortgage. Assuming you don't need to do any of these things anytime soon, the answer to your question is very simple.

You have too much credit if you can't control it or manage your money well.

This doesn't apply, so you have nothing to worry about and thinking about your credit "score" is a waste of time and energy

Woodstock23

Thanks all! I think I was just concerned as the total available amount had crept up without me fully noticing!

As and when I next look to make any large purchases / apply for credit (although sadly, a new Audi isn't on the cards anytime soon!) I'll weigh up the options then.

Feeling reassured now, thanks for taking the time to reply :-)

phillw

As your job appears to be covid proof then depending on your age, you might have too little credit. The sweet spot is to borrow loads of money to buy something that goes up in value and avoid spending any money on anything that goes down in value.

Woodstock23

phillw said:

As your job appears to be covid proof then depending on your age, you might have too little credit. The sweet spot is to borrow loads of money to buy something that goes up in value and avoid spending any money on anything that goes down in value.

An interesting take! I'm in my mid thirties, and have to confess to being fairly risk averse when it comes to financial matters. Assuming your comment applies to property, at least in part,  I'm still in my first property, and felt a bit behind the curve on that one in relation to my peers.

I spent a chunk of my twenties in London which meant purchasing was out of reach, although the higher wage did help me save for the deposit so swings & roundabouts I guess! I'm trying to focus on savings at the moment, both accessible funds and trying to make up ground on a pension, so I'm not hugely focused on making any other big changes at the moment....maybe I should be though!

CRISPIANNE3

Woodstock23 said:

Hi all – I’m a long-time reader of the forums, but this is my first post! I’m looking for some advice about whether or not to close one or more of my credit card accounts.

Over time, I’ve built up to having four cards ; details and credit limits noted below. Gradually over the years the credit limits for some of them have been increased and it now seems to be a lot of credit to have available. I’m not worried about managing it; I’ve used my cards over the years, but never been in difficulty or missed a payment, and utilised 0% balance transfers to manage payment for larger single purchases.

I currently have just over £800 on one of the cards which is at 0% and will be paid off by June, and £120 incurred this month on another which I’ll pay at the statement date.

I suppose what I’m asking is there a downside to having too much credit available from a provider’s perspective?

If it makes any difference, I have a mortgage of around £120k with about 75k equity in the property but no intention of moving anytime soon, and an annual salary of around £45k. My salary fluctuates slightly as I work on fixed term contracts due to the nature of my industry, but have been continuously employed for over 10 years so it’s not unstable thankfully. 

Cards & credit limits

RBS £1,500
Sainsbury’s £7,500
M&S £6,500
Barclaycard £10,200

I have about £70k available on various credit cards. However I make them work for me and not the bank.

The_Real_Cheddar_Bob

I have a couple of credit cards roughly £20k of available credit, which is a lot of money for anyone. I

If you are strong enough to leave the credit availability alone and not let it tempt you then unlimited amounts is enough, if you are not able to avoid temptation then £1 is too much