Have you set a credit card buffer for your card/s?

bambilegs

Hello, does anyone have a buffer on their credit card that they’ve set for themselves that you don’t touch?

Why, why not?

If you do, what is it, and what is your card limit? Does the buffer you’ve set vary depending on your card limit?

Or do you just do something like no more than 25%/50% etc utilisation?

JenB79

Why on God's earth should people only use xx% of their credit limit? If you don't trust yourself with a large credit limit then reduce it or even better, cancel the card. Financial discipline is the key!

dr_adidas01

JenB79 said:

Why on God's earth should people only use xx% of their credit limit? If you don't trust yourself with a large credit limit then reduce it or even better, cancel the card. Financial discipline is the key!

I think this is to do with the mythical 25% of your limit that the credit reference agencies keep banging on about that say you should only use this amount on any of your credit cards. 

As for me I use any amount I don’t have a set limit at all as I pay all my cards in full after my statement is produced. 

onlyfoolsandparking

bambilegs said:

Hello, does anyone have a buffer on their credit card that they’ve set for themselves that you don’t touch?

Why, why not?

If you do, what is it, and what is your card limit? Does the buffer you’ve set vary depending on your card limit?

Or do you just do something like no more than 25%/50% etc utilisation?

If you mean by buffer setting up some sort of alert, well yes I once set up an alert to let me know if I exceeded 6k in spending on a card with a limit of 18k so 30% utilization. Problem with this though was when I used that cards BT offer and put 8k on it, I was getting pinged A LOT!!! was rather annoying and I've never bothered with alerts/buffers since.

I guess if it helps people keep a check on their spending or debt levels then their is no harm in it, each to their own I always say. 

jbrassy

I have a £22.5k limit on my Amex and get spending alerts when I spend over £1k a month. I'm only using it for the cashback and don't want to spend more than I can afford. With the credit limit I have, it's unlikely I'll hit a high utilisation rate, even if I have a crazy month. 

hugheskevi

bambilegs said:

Hello, does anyone have a buffer on their credit card that they’ve set for themselves that you don’t touch?

Why, why not?

If you do, what is it, and what is your card limit? Does the buffer you’ve set vary depending on your card limit?

Or do you just do something like no more than 25%/50% etc utilisation?

The credit card I use for spending has a limit of £9,400. It also has a 0% interest on spending offer in place. Usually I would build up the outstanding balance then open another card, but given Stoozing is worth so little I am in the process of winding things down. Whenever the balance reaches about £8,500 I pay off £1,000 manually. That is just to ensure I don't come close to the limit and risk exceeding it (I've other cards to use should I need to pay larger sums so I don't care about having only a small amount of the limit remaining).

I would as a matter of course however try to keep spending cards at below 90% credit utilisation just to not be extremely close to limit for credit application purposes - no idea whether any lenders care much about that though, but a few more percent makes very little difference.

On my other cards (mostly 0% balance transfer cards) I'd just transfer the maximum allowed for an offer, so outstanding balance typically starts at 95% and within about 6 months dips below 90% as minimum payments are taken.

In my experience over the last 10 years of using nil-fee, 0% balance transfers, credit utilisation seems not to have any impact on lender decisions, and it is the outstanding credit to gross income ratio which seems to be much more important - every time that gets much above 50% I run into declines for new balance transfer cards.

vacheron

My day to day spending card has no alerts as the limit is high enough that I would never approach it except in very unusual circumstances, and it gets paid off in full each month.

My other cards are mainly 0% balance transfer cards which were originally filled as high as the card would allow for a BT (usually 90 to 95%) and the balances on these are now slowly reducing as each month's minimum payment is made. 

vacheron

dr_adidas01 said:

JenB79 said:

Why on God's earth should people only use xx% of their credit limit? If you don't trust yourself with a large credit limit then reduce it or even better, cancel the card. Financial discipline is the key!

I think this is to do with the mythical 25% of your limit that the credit reference agencies keep banging on about that say you should only use this amount on any of your credit cards. 

As for me I use any amount I don’t have a set limit at all as I pay all my cards in full after my statement is produced. 

Yes, I've never understood this. Have a credit limit at your disposal, but only use 25% of it which apparently improves your credit rating meaning that you can potentially get credit with even higher limits and then not use 75% of that too. 

If you have credit and use it wisely, then wring everything you can out of it, it's never caused me any problems!  

Ebe_Scrooge

vacheron said:

dr_adidas01 said:

JenB79 said:

Why on God's earth should people only use xx% of their credit limit? If you don't trust yourself with a large credit limit then reduce it or even better, cancel the card. Financial discipline is the key!

I think this is to do with the mythical 25% of your limit that the credit reference agencies keep banging on about that say you should only use this amount on any of your credit cards. 

As for me I use any amount I don’t have a set limit at all as I pay all my cards in full after my statement is produced. 

Yes, I've never understood this. Have a credit limit at your disposal, but only use 25% of it which apparently improves your credit rating meaning that you can potentially get credit with even higher limits and then not use 75% of that too. 

If you have credit and use it wisely, then wring everything you can out of it, it's never caused me any problems!  

The "Only use 25%" thing is something of a myth perpetuated by the CRAs.  It does have an impact if you're carrying a balance from month-to-month, and only paying the minimum - which is bad from both a financial and credit history point of view anyway.  But if you clear the balance in full every month, it matters not one jot how much of the available limit you're using.

J_B

jbrassy said:

I have a £22.5k limit on my Amex ............

Wow!

I thought our 11K limit was stupidly high!!!

Dandytf

OP I did set a Mental buffer sometime ago, not to exceed 1-2K max spending.
Though have found reducing total utilisation from closer to 10% fun.
Currently using 3%  to be cleared from Aug' in time for Sept and next year.