HSBC inviting to request credit limit increase

F749

I've been with HSBC for 10+ years, and had a credit card with them ever since (as part of my current account package).

At some point my limit was increased from the initial 1k to 2k automatically.

However, now, HSBC sent me an email claiming I "am eligible for a limit increase" providing instructions how to request it.

To me, it seems curious, that they are not offering it, but rather inviting me to request a limit increase.

I am just wondering:

• What might be their thinking behind it - why do they not offer but ask me to request?
• What would this look like on my credit report - search history, and generally the fact that I requested it, and was not offered (at least, that's what it would look like, I presume)
• What would other lenders likely make of this in the future?
• Could this (further) decrease my credit utilisation ratio - is that a good thing? (Have got no overdraft set-up and another CC with a bit over 10k limit; ratio is 10-15% always repaying everything in one go)

I did some research, but couldn't find a reasonable answer; any insights welcome!

born_again

F749 said:

I've been with HSBC for 10+ years, and had a credit card with them ever since (as part of my current account package).

At some point my limit was increased from the initial 1k to 2k automatically.

However, now, HSBC sent me an email claiming I "am eligible for a limit increase" providing instructions how to request it.

To me, it seems curious, that they are not offering it, but rather inviting me to request a limit increase.

I am just wondering:

• What might be their thinking behind it - why do they not offer but ask me to request?
• What would this look like on my credit report - search history, and generally the fact that I requested it, and was not offered (at least, that's what it would look like, I presume)
• What would other lenders likely make of this in the future?
• Could this (further) decrease my credit utilisation ratio - is that a good thing? (Have got no overdraft set-up and another CC with a bit over 10k limit; ratio is 10-15% always repaying everything in one go)

I did some research, but couldn't find a reasonable answer; any insights welcome!

Affordability.
If you request to take up the offer, then at a later date you will not be able to go back & claim that it was a increase that should not have been given.

Nebulous2

HSBC act a bit differently from many other banks. They tend to be cumbersome and bureaucratic. I've never had one of their credit cards, so don't have any increase history to go on. 

However - banks are very wary of claims that customers have been missold loans, been given credit limits they can't afford 'had credit thrown at them.' Having the customer ask for it helps demonstrate it was requested rather than offered. 

I think you're over-thinking the whole credit report utilisation thing. Lenders care much less about that minutiae than many people think. They'll see a credit limit increase, which signals that HSBC trusts you, without knowing who initiated it. 

Unless you are very close to making a major application, like a mortgage, its not worth worrying about. 

F749

Well, thank you for your insights @born_again and @Nebulous2...
... picture is much clearer!

One more thing, that came to mind: what does "being very close to a major application" means in this context? Months, half a year, a year, years?

Do any of you have any thoughts/insights on that?

Nasqueron

F749 said:

Well, thank you for your insights @born_again and @Nebulous2...
... picture is much clearer!

One more thing, that came to mind: what does "being very close to a major application" means in this context? Months, half a year, a year, years?

Do any of you have any thoughts/insights on that?

Typically 3-6 months before say a mortgage application but even then, likely HSBC have already run a soft check or internal check and decided you would probably qualify, most banks don't run a hard check for a limit increase

Maegi

Nothing to worry about, they just ask some basic questions then it gets approved.

They already know what they're willing to lend you when they generate the invitation email.