Reduce credit limit?

Money_and_Travel

Bit of advice please.

I've just been approved for a credit card, but the credit limit is way more than I'm ever likely to use.

I've seen contradictory advice, one side suggesting I reduce it, while the other side suggests I keep it at the current level.

What do you recommend?

400ixl

What proportion of you income are we talking?

Money_and_Travel

If you mean what proportion of my annual income is the credit limit, the answer is that my credit limit is approximately 1/5th of my nett annual salary.

lr1277

If you have other credit products including other cards, loans and overdrafts, what is the sum of all your credit products as a proportion of your income?

Money_and_Travel

I have no other credit products.

The credit card is it.

Malkytheheed

It all comes down to do you trust yourself not to be reckless with it. If you can say for certain you won't get out your depth with it then keep it as it is. Otherwise reduce it. 

CliveOfIndia

Malkytheheed said:

It all comes down to do you trust yourself not to be reckless with it. If you can say for certain you won't get out your depth with it then keep it as it is. Otherwise reduce it. 

This in a nutshell.

Having a reasonably high credit limit shows other lenders that this lender trusts you with the limit they've assigned, so this is a slight positive on your credit record.  And yes, as long as you trust yourself not to use the available credit to go out and buy things you can't actually afford - and, crucially, won't be able to repay in full each month - then there's no issue.

It's only when your total available credit starts to get to be many, many multiples of your income that it can cause issues if you want to apply for more credit.