Building up a decent credit limit

wigglers

Hi i have a few balance transfers all 0% and all being paid off or thats the plan anyway, i recently applied to m n s bank to do a balance transfer card they accepted but only gave me£1000 limit. I dont need to transfer anything until at least next summer but £1000is practically useless to me as a limit. I'm thinking of using it for diesel etc monthly I also have a barclaycard but they put the limit down from 7000 to 300!! After. Lockdown(no late payments) which is best to try and use and pay off each month and which company is likely to increase the limits when have others found they increase? Thanks matt 

Ebe_Scrooge

Firstly, it's common knowledge round these parts that a lot of lenders have been reducing limits over the last year or so - they're simply reducing their exposure in light of Covid.  So don't feel it's anything personal.

Why did you apply for a BT card now if you don't need to transfer anything until next summer?  Surely the transfer window will have closed by the time you need it?  But you then go on to say you're planning to use it for diesel purchases - £1000 limit should be plenty for that, although it's generally advised not to put BT and purchases on the same card.

In general terms, the best way of building up your credit history (and therefore your chances of a limit increase) is simply to use a card for regular, necessary expenses like food and fuel, pay in full every month.  This will, over time, build up a positive history of responsible borrowing and repayment, which is the most important thing.  After a while of doing this, you may be in a position to request a limit increase.

One point to bear in mind - all lenders are becoming more stringent with their lending criteria, so don't be surprised if you're only offered a low limit on a 0% BT card (if you get accepted for one at all).  You really shouldn't bank on being able to transfer the balance when your current offer expires, you need to put plans in place to pay it off before the promotional rate expires.

MalMonroe

Do you mean Marks and Spencer bank? It isn't clear why you applied for a balance transfer card now if you don't need it until next summer because you only have 90 days from the account opening in which to transfer a balance with M&S. 

If you wanted a card to use for diesel maybe you should have applied for the 0% purchase card rather than a balance transfer. 

I don't think anyone knows what any company is likely to do. 

A good suggestion is always try to pay off the cards you already have and if there are any that have reverted to charging interest, pay those off first. 

wigglers

Yeah i have have already transferred what i  needed toon my other bt offer. That's why i don't need to transfer any. 1k would have been not enough to make it worth transferring. So my q is in going to start using either my Barclaycard or the new 1k  marks and spencer card to buy diesel but which should i try? I can cancel the new mns card if that's better or just use them both tu build them both up?? Or just use one and duffer about the pitiful Barc card?? 

Ebe_Scrooge

Just use them both.  As long as you put some transactions through and always pay in full each month, you'll be building up a favourable history.  The value of the transactions doesn't really matter (obviously don't go over your credit limit!).

As a slight aside, when you say "1k would have been not enough to make it worth transferring", it's always worth transferring any amount from a higher APR to a lower APR.  This question crops up time and again on here.  If you want to reduce your interest payments, transfer what you can, pay the minimum each month to the promotional rate and throw everything you can at the higher interest debt.

<Paying only the minimum is usually not a good thing to do, as it can be interpreted as an indication that you're struggling to meet your obligations.  But if you've got a promotional rate running, this is flagged as such, so anyone viewing your credit file would not worry about only minimum payments being made - this is pretty much the behaviour that would be expected.  Of course, the usual caveat always applies - make sure you've got plans in place to clear the balance at the end of the promo, you can never assume you'll be able to do another BT.>