Transfer current account to new bank - do I keep the same credit card limit and overdraft limit?

Cromulent

I'm thinking of transferring my bank account to a new bank. I currently have a current account and a credit card with one of the major UK banks but I'm worried I won't get to keep my overdraft or credit card limit if I move because I am on disability benefits and don't have a job. I've always paid off all of my debts and have never missed a loan payment so I assume my credit score is reasonable. Is there any info on this available, please?

Thank you for your help.

cymruchris

You might or might not get the overdraft depending on what yours currently is - and what a new current account is offering. Some banks have eligibility checkers on current accounts that will let you know your likelihood of getting an overdraft - and at what level.

The credit card is a separate account, and not linked to having a current account - any credit card application will look at your income and credit history, including payments amounts, missed payments, late payments etc and decide whether to grant one or not as the case may be. There is no guarantee that any credit card provider will give you the same credit limit as your existing card. 

Cromulent

cymruchris said:

You might or might not get the overdraft depending on what yours currently is - and what a new current account is offering. Some banks have eligibility checkers on current accounts that will let you know your likelihood of getting an overdraft - and at what level.

The credit card is a separate account, and not linked to having a current account - any credit card application will look at your income and credit history, including payments amounts, missed payments, late payments etc and decide whether to grant one or not as the case may be. There is no guarantee that any credit card provider will give you the same credit limit as your existing card. 

Thank you very much for your help. I guess I won't take the risk. While I always pay back the money I owe it can take me two or three months and I need that credit to hold me over while I get back onto a more stable footing.

Just out of interest does running an eligibility checker affect your credit score? I seem to recall there are two types of credit checks and one of them does but other than that I don't know much about the whole system.

Nebulous2

If you are dependent on your overdraft then I wouldn't risk changing your account. 

A lot of people who play the switching game have several accounts - so you can switch one that doesn't offer very much, keeping those with features you need. They also sometimes setup a new account, a 'donor account' specifically for switching. You may find it difficult to get several new accounts though, as they will take your income and employment status into consideration. 

An eligibility checker should be a soft search, with no impact, but opening a new account is likely to be a hard search, which is recorded differently and could have some bearing on future applications. 

The credit score doesn't matter however. Unless you foresee an application for something big like a mortgage coming soon, I think people should not forego something like a switching bonus simply to feed the credit score monster. 

blue.peter

Cromulent said:

I'm thinking of transferring my bank account to a new bank. I currently have a current account and a credit card with one of the major UK banks but I'm worried I won't get to keep my overdraft or credit card limit if I move because I am on disability benefits and don't have a job. I've always paid off all of my debts and have never missed a loan payment so I assume my credit score is reasonable. Is there any info on this available, please?

Is it a requirement of your existing credit card that you must have a current account with the same bank? If not, you might consider transferring your current account to a new bank but leaving the credit card with the old bank. (I did exactly that a few months ago.)

Alternatively (or even in addition), you could try applying for a second credit card before closing the existing one. That new application neddn't be for a card with either your existing bank or the one to which you're considering transferring your current account.

With regard to your overdraft, you could talk to someone at your proposed new bank about transferring, and ask them if they'll give you the same overdraft. (This is something that might be best done in-branch, if that's practicable.)

Cromulent said:

Just out of interest does running an eligibility checker affect your credit score?

An application normally does, but an eligibility checker won't necessarily do so. If you look at the MSE Credit Card Eligibility Calculator, you'll see an explicit statement at the top to the effect that it doesn't:

Our quick 2 minute eligibility calculator uses a ‘soft search’ to find your acceptance chances, so – unlike applying – it doesn’t impact your credit score.

martinbainbridge1975

Cromulent said:

I'm thinking of transferring my bank account to a new bank. I currently have a current account and a credit card with one of the major UK banks but I'm worried I won't get to keep my overdraft or credit card limit if I move because I am on disability benefits and don't have a job. I've always paid off all of my debts and have never missed a loan payment so I assume my credit score is reasonable. Is there any info on this available, please?

Thank you for your help.

I switched my bank account 6 months ago, from memory on the soft search part of the application I was told I could have an overdraft between 250-1000.  This was Natwest, I took £250 as even though I do not use it I have one direct debit due on payday so this is a safety net if my salary gets delayed, to avoid a refused direct debit fee.

One thing I have noticed since switching is that credit card options are affected when you first change bank accounts, so if anything I would do the credit card first and then the current account after.  Natwest wont give me a credit card reasons for which have been disclosed and are completely stupid.

I do sense that some lenders are definitely tightening up their criteria

blue.peter

martinbainbridge1975 said:

I do sense that some lenders are definitely tightening up their criteria

Yes, I think you're right. I've noticed that the credit limits I've been given on my most recent credit cards have been significantly lower than those I've had in the past. (That's not to say that they're too low, though - the limits that I have are still more than suffiicient for my purposes.) There have also been a number of cases where card issuers have actually reduced credit limits for existing customers.

I've also noticed that:

(a) MBNA don't seem to be interested in issuing new cards to some perfectly good credit risks, including existing MBNA customers; and

(b) credit limits for MasterCards seem to be lower than those for Visa cards for the same customers.

[Deleted User]

blue.peter said:

martinbainbridge1975 said:

I do sense that some lenders are definitely tightening up their criteria

Yes, I think you're right. I've noticed that the credit limits I've been given on my most recent credit cards have been significantly lower than those I've had in the past. (That's not to say that they're too low, though - the limits that I have are still more than suffiicient for my purposes.) There have also been a number of cases where card issuers have actually reduced credit limits for existing customers.

I've also noticed that:

(a) MBNA don't seem to be interested in issuing new cards to some perfectly good credit risks, including existing MBNA customers; and

(b) credit limits for MasterCards seem to be lower than those for Visa cards for the same customers.

(A) MBNA and it's customer base was acquired by Lloyds Banking Group a few years ago and is now basically a sub-brand of Lloyds Bank. It's likely that legacy lending criteria doesn't match new products.

(B) The card scheme has zero influence on lending decisions - that is decided by the card issuer. 

blue.peter

Deleted_User said:

(A) MBNA and it's customer base was acquired by Lloyds Banking Group a few years ago and is now basically a sub-brand of Lloyds Bank. It's likely that legacy lending criteria doesn't match new products.

Fair point.

Deleted_User said:

(B) The card scheme has zero influence on lending decisions - that is decided by the card issuer. 

Yes, I know. Correlation doesn't imply causation. I merely reported my experience, which seems to imply a correlation (however odd it may be). I did not suggest that the card scheme was the cause.

martinbainbridge1975

blue.peter said:

martinbainbridge1975 said:

I do sense that some lenders are definitely tightening up their criteria

Yes, I think you're right. I've noticed that the credit limits I've been given on my most recent credit cards have been significantly lower than those I've had in the past. (That's not to say that they're too low, though - the limits that I have are still more than suffiicient for my purposes.) There have also been a number of cases where card issuers have actually reduced credit limits for existing customers.

I've also noticed that:

(a) MBNA don't seem to be interested in issuing new cards to some perfectly good credit risks, including existing MBNA customers; and

(b) credit limits for MasterCards seem to be lower than those for Visa cards for the same customers.

I had an issued with MBNA a couple of years ago, personally they are a company to steer clear of. I wanted a 15k personal loan to buy a car from a finance company and they declined my application.

Asked for the reasons why and all 4 were not justifiable, at the time I had the car finance and maximum 7-800 on a credit card so more than had the affordability and the payment was near enough the same as the finance that was in force at the time.

There is a lack of consistency with criteria I think, natwest wont give me a 0 percent credit card despite me banking with them, yet they will authorise £1000 overdraft on my bank account at 39.9 apr, that is encouraging customers to get into higher interest rate debt which is kind of mis-selling

eskbanker

martinbainbridge1975 said:
There is a lack of consistency with criteria I think, natwest wont give me a 0 percent credit card despite me banking with them, yet they will authorise £1000 overdraft on my bank account at 39.9 apr, that is encouraging customers to get into higher interest rate debt which is kind of mis-selling

It really isn't mis-selling, it's simply saying that their risk assessment dictates that if they lend you money they're only willing to do so if you pay interest for the privilege.  Credit card lending and current account overdrafts are different types of lending so will often be subject to different underwriting criteria, and 0% credit cards in particular will generally be regarded as prime offerings, made available to a relatively limited population....