Is there some major financial benefits to the banks of issuing new cards?

Zaul22

I have a BoS card with a very low limit and was waiting the 3 months to ask for an increase. Meanwhile Halifax and Lloyds pre approved me for a £2000 limit on a new card. When I applied BoS refused to offer me any increase whatsoever to my credit limit. After saying no a thing popped up in the app asking me if I want a 2nd card with them. I ran the BoS eligibility checker and they too pre approved me for the same £2000 on a 2nd card. Is there a significant financial benefit to banks for issuing new cards over just increasing the limit on existing cards? I thought it was stupid that the same group would offer me a new card but not an increase but when I realized that even literally the exact same bank would give me a 2nd card it seems complete nonsense. Especially since the existing card's 0% will end sooner so surely that would be more beneficial to the bank. 

retiredbanker1

More cards issued by them = more transaction charges and/or interest for them RATHER than you spend the money with a rival.
To be offered a second card means they rate you as low risk so don't miss use it.

grumbler

retiredbanker1 said:

More cards issued by them = more transaction charges and/or interest for them RATHER than you spend the money with a rival.

I don't see why a person with two cards will spend more than with one card with big enough limit .

Zaul22 said:

... I realized that even literally the exact same bank would give me a 2nd card it seems complete nonsense. ...

I agree. Now computers rule, often programmed by some idiot lacking common sense (or by several people incapable of coordinating their work).

lr1277

As I see it, and I have no special knowledge, you run a few risks here:

1) They share information across the group. This might only be shared once you have applied.

2) The rules for checking elgibility are different  to the rules for checking an application

3) Following on from point 1)  the information available at elegibility checking stage is different from the information available at processing application stage.

A point to consider is do you have the income to support the 'new' combined limit?

I wouldn't make the application because I would be worried by the information sharing, but the final decision is up to you.

Zaul22

It looks like I will have to just get a new card, I was just hoping to avoid an extra hard search by increasing the limit. Although they inexplicably didn't hard search me when I applied for the BoS card...

[Deleted User]

lr1277 said:

As I see it, and I have no special knowledge, you run a few risks here:

1) They share information across the group. This might only be shared once you have applied.

2) The rules for checking eligibility are different  to the rules for checking an application

3) Following on from point 1)  the information available at eligibility checking stage is different from the information available at processing application stage.

A point to consider is do you have the income to support the 'new' combined limit?

I wouldn't make the application because I would be worried by the information sharing, but the final decision is up to you

The information will already be shared across the group 

1- Halifax and Bank of Scotland are the same bank - that not sharing. 
2- Most of the groups systems/staff will be shared across the 'brands' anyway
3- They will check internally and externally (credit reference agencies) when someone makes a new application.

To raise the limit, they would need to frequently use the card for a period of time or ask for a manual review by an underwriter.