Credit limit reduced or card closed??? This is why (maybe)

jimbo26

Thanks Yorkshireboy

simonts

I kind of agree with the post at the top, Lenders are reducing their exposure.

When my limit was dropped I was actually called by MBNA who basically wanted to know how much I was now earning so they could compare to my current balance on cards and total available credit. Their decision was that they felt I would have trouble paying (odd that I have never had trouble before)

They also told me exactly what my limits on other cards were and current balances though they were not able to say who the other cards were with.

wayoflife

some very good points here

the main thing to consider is that no one (even experian) can give you a definative answer to what is better to do and what isnt (I apologise for my awful grammar!)

However I think you should just follow the basics as there is no set formula;

You MUST;

Never go over your credit limit
Always make minimum payments on the card and do this on time
Read the T&C'S and keep upto date with them as they can and do change
If you arent 'financially minded' then ring the company and ask them a list of questions about everything you need to know

IMO the following are good practice;

always pay your cards off in full

assess your cards regularly, if they have no benefit then close them. Also
assess your spending and available spending, for example if you have a card with a £4,000 limit and you only use it for petrol then cut this right down

at the very most make one credit application per month

Always double check everything. There have been loads of times when something hasnt gone through and if I hadnt of chased it up I would have been in trouble

keep your cards 'active' by this I mean make sure theres at least one transaction from that card during that statement cycle. Perhaps consider regular payments from your card for certain bills (make sure you know the pros and cons with this though) if you want this done automatically each month

use the 6 month rule (apply for new credit only every 6 months, use the cards and follow the MUST do rules, keep your card active and you should get more credit in another 6 months)

And finally, when it comes to borrowing, 'play the game' ask the right questions. If there is a promotion, make sure you find out the ins and outs, work everything out before you go ahead and do anything to make sure that you have done the maths

remember that credit is a priveledge and not a right. At the same time (in a non arrogant way) be aware of your 'status' and by this I mean dont be scared to ask for a limit increase, extension to a 0% deal e.t.c. and question any rejections for this as you are making the company alot of money and they will want to keep you as a customer

UK007BullDog

Having read some of the latest posts on the credit card forum I think my rambling thesis might be right on the money (no pun intended of course) :rotfl: