Credit Crunch? What Credit Crunch?

sara_501

Ok guys

so here's room for a bit of a debate, I just recently applied for 2 credit cards in close succession, and got the largest credit limits on both in my history of borrowing,

I've read tons of articles in the broadsheets/tabloid/local press regarding the impending credit crunch

yet apparently the lenders and throwing it at me like there's no tomorrow....

what's with this?

[That said - Sara_501 intends to be a good little borrower and is not encouraging anyone to go out and apply for copious amounts of credit] Thought it best to set a disclaimer

wornoutmumoftwo

I thought I read somewhere that if you have a perfect credit rating that applying for credit wouldn't be a problem.

john3:16

I'm wondering whether debt is being 'shifted' or accumulated with CCards more than Mortage Equity now in this economic climate. In other words, are people opening up other lines of credit as an alternative to their Mortgages?

The amount of credit I have available on my CCards (at either 0% or low interest) is well into 5 figures! But I'm not touching it!

Dangerous.

Gerry

thatboydean

I was also accepted for the largest limit ive ever had last month but i did apply for this card with my own bank.

lisyloo

Hi Sara,

With a mortgage or debt you borrow 100% of what you asked for at the beginning.
With credit cards people often have a much smaller amount outstanding as a proportion of their limit.

Now I realise that everyone could go out tomorrow and spend like crazy but across tens of thousand of people it's reasonable fot the banks to assume that only a % will be outstanding at any one time,

thatboydean

lisyloo wrote: »

Hi Sara,

With a mortgage or debt you borrow 100% of what you asked for at the beginning.
With credit cards people often have a much smaller amount outstanding as a proportion of their limit.

Now I realise that everyone could go out tomorrow and spend like crazy but across tens of thousand of people it's reasonable fot the banks to assume that only a % will be outstanding at any one time,

okay so what yr saying is that lenders are picky about who'll they will lend to at 100% if at all.

sara_501

thatboydean wrote: »

okay so what yr saying is that lenders are picky about who'll they will lend to at 100% if at all.

That didn't come across to me at all in the OP message - but I'd be interested to know if that's the case...

lisyloo

okay so what yr saying is that lenders are picky about who'll they will lend to at 100% if at al

No that wasn't what I meant.
What I meant was that if you ask for a mortgage for £100K they actually have to give you £100K (at least on day one).
If you get a credit card for £10K it's fairly unlikely that you'll go out and spend £10K on it.
It's much more likely you'll spend £500 - £1000 per month and pay it off.
Not everyone is the same in their habit but across a large pool they can be pretty certain that they will never have to giev out 100%.

I don't honestly know how their business model works so I'm speculating, but I'd be very suprised if they had 100% of the everyone's credit limit available.
In general businesses don't work that way.

However if someone want a mortgae for a house, on day 1 they need 100% of the money to buy the house, so lender DO have to have 100% of the money available and hand it over.

Across a large pool of people visa and mastercard will ALWAYS have payements being made so they never actually have to provide all the money as people are paying all the time.

Bismarck

The credit crunch has made the providers re-align where they lend...they want to lend more to some and less to others so if you tick their boxes they'll throw more opportunity at you to try and make some money out of you. IF you don't look like a good prospect for repaying the money eventually or making them any profit in interest them they'll most likely restrict your credit.

You must just tick their boxes....don't spend it all at once!

bethanyrayne

sara_501 wrote: »

Ok guys

so here's room for a bit of a debate, I just recently applied for 2 credit cards in close succession, and got the largest credit limits on both in my history of borrowing,

I've read tons of articles in the broadsheets/tabloid/local press regarding the impending credit crunch

yet apparently the lenders and throwing it at me like there's no tomorrow....

what's with this?

[That said - Sara_501 intends to be a good little borrower and is not encouraging anyone to go out and apply for copious amounts of credit] Thought it best to set a disclaimer

Without any details of your personal status your post is worse than useless.

CannyJock

john3:16 wrote: »

I'm wondering whether debt is being 'shifted' or accumulated with CCards more than Mortage Equity now in this economic climate. In other words, are people opening up other lines of credit as an alternative to their Mortgages?

The amount of credit I have available on my CCards (at either 0% or low interest) is well into 5 figures! But I'm not touching it!

Dangerous.

Gerry

I'd stooze the lot while the offers were there. You've got a shedload of available credit on your credit report that could be earning you interest.