Keeping a 'just in case' card...

ferry

Just out of interest I have an Egg CC which has a 0 balance on it but a 5K credit limit.I've had this card a couple of years now and Egg have been very good to me historically.
I intend to reduce the limit to £1000 and keep this as just an 'emergency' card..
Any ideas on how Egg will view my business if I dont spend on it for long periods?

Just thinking out loud in the recent events surrounding Egg's decision to withdraw cards from some customers

Thanks as usual for the advice
Ferry

BenL

I don't know about Egg but they may do another run of customers to get rid of or they may not risk it after the hammering they took over it.

My just in case card is a Nationwide card as it also doubles for the abroad usage card.

I switch the others around but this one always stays.

I've never had any issues with Nationwide on this approach, they don't send a statement if I haven't used it and I went quite a while without going away abroad a few years ago.

Ben

Swans1912

Having a credit card 'just incase' is never financially best practise however we all do it.

I put any online spend or big purchase on my credit card and then pay off in full, the protection is better than a standard debit card.

I don't think egg will see you as a good customer, your not making them any/much money? If you have a £0 balance why don't you apply for a credit card that is better suited, i.e a cash-back card.

I like to hold on to my £0 balance card, I find it hard to part with them.

Moggles_2

Wouldn't you be better off setting some cash aside each month in a no-notice cash ISA or high interest savings account? Then you would have a £1000 emergency cash fund, which is free to use

Volcane

I keep a cashback card for my "just-in-case" card too as it has a high credit limit and also use it for day to day purchases as well.

Moggles_2

I intend to reduce the limit to £1000

I would think carefully before you reduce a modest £5k credit limit. Lowering credit limits can affect future applications for credit, if you overdo it. Moderation is the key.

Be aware too, that it isn't always possible to re-instate some of the old limit should you change your mind later.

Other things being equal, it's better (credit score-wise) to have fewer cards with higher limits, than a clutch of cards with lower limits. So, if you want to reduce your available credit, it's better to cancel a card outright, as Martin advises, than lower the credit limit.

Riq

My "just in case" card is a Natwest debit card with £60 in there.
It's basically to save my embarassment at the petrol station as it's not like I can put the petrol back if my card is some how declined which as it's so battered is hgihly likely.

ferry

Moggles wrote: »

I would think carefully before you reduce a modest £5k credit limit. Lowering credit limits can affect future applications for credit, if you overdo it. Moderation is the key.

Be aware too, that it isn't always possible to re-instate some of the old limit should you change your mind later.

Other things being equal, it's better (credit score-wise) to have fewer cards with higher limits, than a clutch of cards with lower limits. So, if you want to reduce your available credit, it's better to cancel a card outright, as Martin advises, than lower the credit limit.

Thanks for the excellent advice as usual.
Could I ask what is actually meant by 'available credit' and how is it calculated-Is it the amount of credit available on each card between balance and limit ?

Many thanks
F

YorkshireBoy

ferry wrote: »

Thanks for the excellent advice as usual.
Could I ask what is actually meant by 'available credit' and how is it calculated-Is it the amount of credit available on each card between balance and limit ?

It's the sum of all your credit card limits and overdraft facilities, as determined by a credit reference agency search. ie, what you could go out and blow tomorrow.

It's normally (at least with stoozers) expressed as a percentage of your salary, and the higher it is (mine is currently around 250%) the worse your 'score' will be with each lender.

jimbo26

Moggles wrote: »

Wouldn't you be better off setting some cash aside each month in a no-notice cash ISA or high interest savings account? Then you would have a £1000 emergency cash fund, which is free to use

Good idea but not much use when you are stuck in the middle of nowhere or abroad though.

CLAPTON

my twopennyworth

Unless (and its a big unless) you don't feel comfortable using CCs because you feel they are too tempting to overspend, then I would suggest that you have 2 CCs and use them regularly but pay them off in full each month.

So maybe buy petrol or whatever each month and have a DD set up for the full amount.

The reasons are
a. this will enhance or maintenance a good credit history
b. allow them to be used for emergency use... to me emergency use includes the obvious being stuck miles form home and needing petrol etc (but debit cars are fine for this ) but also for situations where CC work best... need to book a hotel room..some are pretty impossible without a CC or hire a car in an emergency.
With family living abroad and them travelling a lot, a passport and a clutch of credit cards would sort of most situations.

c. and it you dont use them atall you might find they are simply cancelled or not renewed when they expire