Very low credit limit on pre-approved M&S card

doveman

CliveOfIndia said:

doveman said:

I can expect a credit limit of £850, which is far too low to do my balance transfer (£2000), let alone use it for anything else.

As stated by eskbanker, transfer what you can - it'll still save you money in terms of lower interest payments.

But as regards your statement about using it for anything else - it's never a good idea to spend on a BT card unless you have read and fully understood the T&Cs.

There are a minority of cards where you can use it for spending as well, but as a general rule you mustn't spend on them.  Otherwise you'll be charged interest on the spending (even if you repay the "spending" portion of the debt) because you're not clearing the balance in full at the end of the month.

Yeah, good point about not using a BT card for spending as well, for the reasons you've said, although this card has 0% on purchases for 20 months so I guess it would be OK (if it had a higher credit limit).

I still have some interest-free time on my current Lloyds card, so there's no urgency to transfer the balance and opening a new card with a £850 credit limit and just transferring that will be a bit pointless, as I'll still be left with the rest on the Lloyds card when the interest-free period expires. So it's probably best if I decline this offer, close my RBS card, and then reapply in a month or so and hope that I get a higher credit limit.

doveman

retiredbanker1 said:

Hoenir said:

Always advisable to close down unused cards. Wait a while before reapplying. As the reason for closure won't be apparent. 

I would argue that this is wrong.
I have several cards with nothing owing on them and get regular balance/money transfers from them.

I haven't received any offers or correspondence from RBS since 2021, so I don't think there's any reason to hang on to that card.

eskbanker

doveman said:

eskbanker said:

Each lender will have their own proprietary and unpublished underwriting algorithms, so they won't explain the calculation they'll have used to derive the £850 limit and won't increase that in the short term.

Best bet would be to take the card and BT up to its limit - now that you've presumably gone through the hard credit check there's no point in rejecting the card, but you could always apply for another?

I take your point about the hard credit check having already been done, but that shouldn't really be a problem if I reject the card, close my old RBS card, and then reapply in a month or so would it?

There doesn't seem much point in accepting the card, when the credit limit is too low for me to use it as intended.

It's more about 'a bird in the hand being worth two in the bush', i.e. closing a card with a £4K limit doesn't mean that you'd get something similar next time you applied, so there's no guarantee that you'd actually find a better card than what you've been offered.

doveman

eskbanker said:

doveman said:

eskbanker said:

Each lender will have their own proprietary and unpublished underwriting algorithms, so they won't explain the calculation they'll have used to derive the £850 limit and won't increase that in the short term.

Best bet would be to take the card and BT up to its limit - now that you've presumably gone through the hard credit check there's no point in rejecting the card, but you could always apply for another?

I take your point about the hard credit check having already been done, but that shouldn't really be a problem if I reject the card, close my old RBS card, and then reapply in a month or so would it?

There doesn't seem much point in accepting the card, when the credit limit is too low for me to use it as intended.

It's more about 'a bird in the hand being worth two in the bush', i.e. closing a card with a £4K limit doesn't mean that you'd get something similar next time you applied, so there's no guarantee that you'd actually find a better card than what you've been offered.

Sure, there's no guarantee, but it seems likely that they will look at how much credit I already have available when deciding how much they're willing to give me.

eskbanker

doveman said:

eskbanker said:

doveman said:

eskbanker said:

Each lender will have their own proprietary and unpublished underwriting algorithms, so they won't explain the calculation they'll have used to derive the £850 limit and won't increase that in the short term.

Best bet would be to take the card and BT up to its limit - now that you've presumably gone through the hard credit check there's no point in rejecting the card, but you could always apply for another?

I take your point about the hard credit check having already been done, but that shouldn't really be a problem if I reject the card, close my old RBS card, and then reapply in a month or so would it?

There doesn't seem much point in accepting the card, when the credit limit is too low for me to use it as intended.

It's more about 'a bird in the hand being worth two in the bush', i.e. closing a card with a £4K limit doesn't mean that you'd get something similar next time you applied, so there's no guarantee that you'd actually find a better card than what you've been offered.

Sure, there's no guarantee, but it seems likely that they will look at how much credit I already have available when deciding how much they're willing to give me.

Yes, they will consider available credit as one parameter, but there are numerous other factors in the equation, some of which may be more significant in deciding limits, such as current debt, lender policies, etc, especially for premium products such as BT cards.

maxximus75

Just give them a call and say you would like to BT of x£ but don't have a high enough limit, is there anything they can do?

The worst they can say is, no.

doveman

maxximus75 said:

Just give them a call and say you would like to BT of x£ but don't have a high enough limit, is there anything they can do?

The worst they can say is, no.

Yeah, they said no! They said I could ask them to increase the credit limit after I've had the card for 6 months, and I pointed out that the balance transfer has to be done within the first 90 days, but they said they couldn't change it.