Credit crunch starting to bite or just the same old story

N5girl

Hi

I have recently been turned down for 2 credit cards (Amex platinum cashback and Barlcaycard Platinum). I am a home-owner, excellent salary, pay off my cards, normally in full but have at times incurred the odd bit of interest here and there (not for a while though).

Currently I have 3 cards. A Halifax 0% card, close to its limit with the cash to pay it off in full in the bank. Two visa cards, one used for trips abroad and another which is not used at all. I used to use them but my purse was stolen a few mths ago and I got out of the habit of using them (as far as I am aware there was no fraud on them).

I also remortgaged in the last few mths (no problems with that at all)

3mths ago my minimum payment for Halifax was made on time but not for the correct amount (too little unfortunately). My limit was reduced by Halifax as a penalty for 4mths. I assume this is why I have been rejected on recent applications.

I have applied to get my credit record to check there is nothing else wrong. So what I would like to know is the following:

What should I be looking for on my credit-score?
How long will this 'missed' or underpayment affect my ability to get credit?
Should I pay down the Halifax card, will that make any difference?
Should I get rid of one of my visa cards - I understand that even when you close down an account they can still see it.

I am also wondering whether now is just not a good time to apply for any form of credit.

Many thanks for your help.

vicky_kidder

Hi N5 girl.

I would wait unitl the four month period is over before putting in another application. In the mean time it may be a good idea to pay off a sizable chunk if not all of your Halifax card.

Although, I think you might ber right in your pondering that the current atmosphere is not right for getting a credit card. When I started my degree I was getting at least one letter a week asking me to get a credit card. Whereas now, I'm in my final year with a decent paying job due to start next month (£24,000), £5,000 savings in an ISA and MY OWN BANK refued me for a credit card. I have no other credit cards and apart from student loan I have no debt. I'm not overdrawn, hardly ever am, but still got declined.

Also, my friend who, combined with her live-in partner earn about £70,000 with their combined income also got declined a card and got dumped from another because she always paid on time.

I'd definitely give it another go, but don't take it too personally if you get knocked back!

N5girl

Thanks for the reply

Amex told me that there was nothing derogatory was on the file and mentioned the fact that they score based on your available credit. If you go over a certain level on a % basis they automatically decline. So perhaps it is the empty credit cards that were the problem in that case.

I am loathed to pay down the Halifax card as it is giving up free money. Oh well, serves me right for being greedy!

JimmyTheWig

Why do you want another card - just for the rewards?
I'd have thought that you're better off keeping the money to pay the Halifax card in a high interest savings account until the 0% runs out (i.e. Stoozing) than paying it off in order to get the rewards.

Out of interest, did they not take your 0% deal away when you underpaid the minimum payment? Or did you ask them to re-instate it?

N5girl

Yes I am stoozing. However if it is a case of paying off a few grand will get my credit score up and running again I am happy to do it because the return on a few grand at 6.5% gross for a few mths is probably in the region of £20-30 net.

My 0% offer is still working - they just reduced my credit limit - which effectively means my slow stooze is somewhat curtailed. I explained that it was a genuine error (and they could see the payment was made on time) - however I think it was a case of 'computer says no'. They said they would restore the limit after 4mths but I have my doubts about that too.

JimmyTheWig

And do you want the new cards for the rewards?
Excluding introductory deals (lets assume you can still get these deals when your 0% Halifax has run out, and so you won't miss out on these) what rewards are you hoping for? 1% of everything you spend?
How much would you spend on the new card each month? You'd have to spend half as much as you pay off your Halifax card _each month_ to break even.
The only reason I can see for doing it is if you have a specific reason to want the introductory rewards before your 0% runs out, e.g. you've got a big purchase in mind that you want the maximum cash back on.