What if credit card issuer lowers my limit to below my balance?

Judetheunobscure

I've just successfully applied for a Sainsbury's credit card with a 24 month interest-free period and a credit limit of £6000. I'm planning to use it to pay for central heating at a cost of over £5000. The terms and conditions of the card say that they may change my limit at any time. Needless to say I'm concerned at the possibility of them lowering the limit to below the balance when they see I've almost maxed out the card with my first (and only) purchase. 

If they do this, does this mean that the interest-free period is now null and void because I'm over the limit? And how likely is it that they would do something like this? I have a "very good" credit rating and am currently using 11% of the credit available to me. The new purchase would take me to just under 25% of my available credit. 

Would I be better spreading the cost over 2 or 3 interest-free credit cards if the above is going to be a risk?

Many thanks in advance. 

[Deleted User]

They won't. 

Judetheunobscure

That's cryptic! Are you saying they won't reduce the limit to below my balance? 

[Deleted User]

Correct.        

MalMonroe

You say

"If they do this, does this mean that the interest-free period is now null and void because I'm over the limit? And how likely is it that they would do something like this?"

Why would the interest free period be null and void? You are not over the limit and you don't intend to be over the limit either. You've got a great deal to buy your central heating. You seem to think it's too good to be true but it's what they have given you so go for it. 

As zx81 says, they won't change the limit once you're using it. Sainsbury's are happy for you to use your card and they are also happy if you put a large balance on it. Their hope is that you won't pay it off before the 0% period expires so that they can charge you interest but you have a plan of action. So enjoy it (as much as you can whilst having central heating installed) and try not to worry.   

PS I've had a Sainsbury's card for three years now and haven't had any problems or credit limit changes in that time. 

Judetheunobscure

Many thanks for the replies and for putting my mind at rest. You're correct, MalMonroe in that I was looking for ways they could potentially rip me off as although I've had several interest-free cards in the past, I've never used one in this way to make such a large purchase right off the bat. I've also never had such a high credit limit on a new card before so it seemed too good to be true. 

northernstar007

Judetheunobscure said:

Many thanks for the replies and for putting my mind at rest. You're correct, MalMonroe in that I was looking for ways they could potentially rip me off as although I've had several interest-free cards in the past, I've never used one in this way to make such a large purchase right off the bat. I've also never had such a high credit limit on a new card before so it seemed too good to be true. 

but what ever you do, DONT miss a payment 0% will be off the card and straight on to your reg apr inc our heating sys on reg apr, so maybe set a fixed standing order up?

northernstar007

btw, make sure the co will take credit cards, i think some might not

Judetheunobscure

Thanks northernstar007 I set up the direct debit during the application process and I checked with the heating company as to whether they take credit cards before I went to the bother of applying. My fallback option if they didn't take cards was going to be a cash transfer from MBNA at 3.9% but am well chuffed with the 24 months interest free. Especially after the reassurance I've received here re my original question!