Credit Limits - or not..?
Comments
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What do you mean when you say that you recently made an online purchase 'by mistake'.
Do you mean that the purchase was a mistake or that you used the Lloyds credit card by mistake?
What you were told by Lloyds is obviously not true in the sense that you have implied. While of course it is up to the merchant if they take the money or not in the sense that if the merchant was for some reason to decide not to bother to submit the transaction and take their money they are under no obligation to do so, it is not relevant here.
I am surprised to an extent that they allowed the credit limit to be exceeded by 'several hundred pounds' although if you are a good customer with a high credit limit they may have permitted this.
This is of course correct but we are talking about a transaction of 'several hundred pounds'. Such an amount would surely be well above the floor limit (or whatever floor limits are called these days) of the merchant and therefore Lloyds would have been under no obligation to honour it.Deleted_User wrote: »If the payments are offline, it can't be checked against the credit limit. Therefore it will be approved.
What exactly is your problem?
You have got your goods (or whatever you bought). If you don't want them as the purchase was a mistake you cannot use this as an excuse to try to avoid paying for them.
Simply repay the over limit amount ASAP and after you have paid call Lloyds and very politely explain that you used their card by mistake putting it over the limit, you have repaid the money and would they please please waive the over limit charge and not mark your credit files adversely.
You say that this has caused all sorts of problems. If you could elaborate on the exact nature of these problems, perhaps somebody could advise.0 -
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How do you make a purchase by mistake?0
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What people are saying here is if you can;t be bothered to know how much is left on your credit card and rely on it being declined then you are going to have a bad time.
Also it is really bad practice to go over 50% of your credit limit anyway.0 -
It can lead to a lower credit rating as some lenders will consider you higher risk, this will mean less generous deals for you later or if you want additional cards (depending on personal circumstances and history).
You should use the card regularly but if you get up to 75% they take a very dim view. Of course this depends on previous history and whether you have been meeting your minimum repayments every month. I.e. Stoozing. It is not for the faint of heart and can easily plunge someone into thousands of pounds worth of additional debt.
So not best practice but allowable if you can keep it going.0 -
Really? I've not come across this. I have a number of credit cards and one is currently over 50% as it has been since I took it out as it is a 0% BT card, and it will be until the 0% period runs out, and I have another that I use for general purchases that often goes over 50% of its limit but I pay it off in full every month, and I have had no problems. In what way is it "bad practice" to do this?
Also it is really bad practice to go over 50% of your credit limit anyway.Retired at age 56 after having "light bulb moment" due to reading MSE and its forums. Have been converted to the "budget to zero" concept and use YNAB for all monthly budgeting and long term goals.0 -
Its bad practice if you want a healthy credit file. Generally its best to not utilise more than 30% of your available credit limits. Of course you can use more, and they are there to be used. But, you may find that things get a little bit tricky.
By this I mean, other lenders may consider you to be over exposed. As card companies operate a risk based pricing model, and have acccess to other companies data via the CRAs, things tend to happen.
For example, you might get letters informing you of a change in APR. You might get another lender lower your credit limits. That of course means that your credit utilisation average increases, and so it goes on.
If you are still over your limit. Pay it down today, do not wait for the statement to be produced. Clear it, because when that hits the CRA, the events I have mentioned above may start.0 -
tempus_fugit and Fady
Like most you have probably made use of all the borrowing on a balance transfer and who wouldnt, which is why your individual cards may be over 50%. But its not single cards we are talking about here, unless you only have one card. We are talking about overall credit card utilisation, which you want to be no more than 30% to get the best APRs etc.
Add up all your credit cards limits, add up all the debt, and then divide the debt by the card limits and multiply by 100.
Example £20000 of limits across 4 credit cards. Owes £5000
=(5000/20000) * 100 = 25% Utilisation Good credit risk, likely to have Lower APRs.
Whilst on the subject, if you are on a promo rate, the CRAs know that and they are marked on your records. Which in itself is another identifyer of credit risk.0
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