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Do I increase credit limit or get another card?

18
Found 25th Feb 2015
I've received 2 letters this week. One from vanquis, whom I have my first credit card with. I've never gone over my limit so since october I have a clean credit file, building it for when it really matters. I've been told they are increasing my limit to £1000 in a month. I have the option to stop this.

I also got a letter from Aqua, who are offering me a credit card too.

Now, I always spend responsibly. I only work part time and as I'm studying I don't earn a lot (and don't need to). The £500 vanquis limit is about what I always have in at any point in time. I use money dashboard to check my actual balance so I'm always aware of how much I'm spending and how much is on my credit card. I ONLY use the credit card to build my credit score. I have never - and will never - let myself use the credit card believing it is free money.

I find it unlikely any credit card provider will give me a credit card with benefits such as cashback etc, (if anyone knows of something please let me know), so for now what looks like the best option? Increase my limit on one card, or get another for emergencies and keep it dormant until necessary. Would underusing a credit limit, or underusing a card completely do the most damage to my score?

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18 Comments

No, under using would do the least damage unless of course you were applying for credit at Brighthouse...

Having a £1000 limit shows on your credit file, therefore potential lenders know you can get yourself into £1000+ of debt, which would increase their risk, therefore decrease your chances of obtaining such credit.

The lower, the better, IMO.

Original Poster

GrantG182

No, under using would do the least damage unless of course you were … No, under using would do the least damage unless of course you were applying for credit at Brighthouse...Having a £1000 limit shows on your credit file, therefore potential lenders know you can get yourself into £1000+ of debt, which would increase their risk, therefore decrease your chances of obtaining such credit.The lower, the better, IMO.



Thanks. I've rejected the increase and accepted a card with aqua. I think for now that's good enough. It'll be a total of £800 limit, but history will show on my file that I always pay off in full. I get some good interest rates with my current accounts so this way I can make money and increase my image to lenders.

Obviously increasing my hours at work is better than borrowing more, and easier to do!

Multiple credit applications (and cards) can have a negative effect on your credit score so I would have said the opposite tbh. As for monitoring your spending, do what I do and note all your incomings and outgoings in a small cash book and reconcile it with your bank/card statements so you know exactly where you stand at anytime.

Original Poster

tallpete33

Multiple credit applications (and cards) can have a negative effect on … Multiple credit applications (and cards) can have a negative effect on your credit score so I would have said the opposite tbh. As for monitoring your spending, do what I do and note all your incomings and outgoings in a small cash book and reconcile it with your bank/card statements so you know exactly where you stand at anytime.



Like I said, I use money dashboard. I spend as much as I can afford and use a credit card to my advantage. Such as say buying and selling something. I've refrained from applying for credit a lot now since I realised most lenders require a proper salary, which I won't have for at least another 4 years. I feel lucky to have even one card and whilst I don't need the second, it's nice to have even if just to separate my purchases

Taz1529

Like I said, I use money dashboard. I spend as much as I can afford and … Like I said, I use money dashboard. I spend as much as I can afford and use a credit card to my advantage. Such as say buying and selling something. I've refrained from applying for credit a lot now since I realised most lenders require a proper salary, which I won't have for at least another 4 years. I feel lucky to have even one card and whilst I don't need the second, it's nice to have even if just to separate my purchases



I don't see your logic. Having one card with a £1000 limit is the same as two with £500 limits but I would say one is more preferable as it's easier to manage.Having two cards is like having forty quid on you but putting it into two wallets, and in your situation pretty unnecessary

Having two cards will be a negative on your credit score in comparison to one card with a higher limit that you have maintained payments on. Shows you can manage your budget within your means and all though you have a higher limit you do not take advantage of the credit.

Check out Martin Lewis website. I'm sure I read there that credit score rating also includes factors whether you go into debt and settle that debt. Companies like to earn money from you. So if you settle every month - nobody is earning from you. Apparantly, whilst that shows you are low risk for relevantly low stuff when it comes to a higher loan you have not been tested and increases the risk.

Having said all that, its the way I use my credit card also. I have always figured that if I cannot afford something, it is better to do without and save for it. The only real loans I ever took out was the mortgages - all now settled thank goodness,

increase your credit limit so that you have more credit power. taking out another credit card to top up will affect your credit rating.

Sounds like you are good with your money so it wouldn't matter which option you take.

I found it difficult to keep track of multiple cards, and missed a payment once on my Lloyds card, they wacked me with
a £20 fee, I overpaid by a few pounds so the card is actually in credit and haven't used it since, so they haven't sent me a replacement and just waste money posting me statements.

There are two different type of basic Capital One car and one of them gives you 0.5% cashback. They are both very easy to get. I don't get why you would ever get another car instead of increasing your credit limit especially when they have offered it to you. I would have more than one card if they ordered different things like 0% purchase or balance transfer, but not just having two cards for the sake of it.

Edit: owning lots of cards won't necessarily hurt your credit score, in fact it may help it. Mot people say you only want to be utilising about 20-30% of your credit. So if you currently have a Vanquis card with a £500 limit and you currently use all of that then that is very bad. You should 100% accept the extra credit. If your peak dept is £500 you really want two cards each with £1000 of credit.
Edited by: "MIDURIX" 25th Feb 2015

Original Poster

MIDURIX

There are two different type of basic Capital One car and one of them … There are two different type of basic Capital One car and one of them gives you 0.5% cashback. They are both very easy to get. I don't get why you would ever get another car instead of increasing your credit limit especially when they have offered it to you. I would have more than one card if they ordered different things like 0% purchase or balance transfer, but not just having two cards for the sake of it.Edit: owning lots of cards won't necessarily hurt your credit score, in fact it may help it. Mot people say you only want to be utilising about 20-30% of your credit. So if you currently have a Vanquis card with a £500 limit and you currently use all of that then that is very bad. You should 100% accept the extra credit. If your peak dept is £500 you really want two cards each with £1000 of credit.



The aqua card gives me access to a proper credit rating for free. I use noddle already but don't have the premium features. If my limit can be increased soon, which I might ring up for, then I can cancel my vanquis card and that really has only been for building credit score

Taz1529

The aqua card gives me access to a proper credit rating for free. I use … The aqua card gives me access to a proper credit rating for free. I use noddle already but don't have the premium features. If my limit can be increased soon, which I might ring up for, then I can cancel my vanquis card and that really has only been for building credit score


After looking around it says you should only be using 20-30% of you credit, at the moment aren't you using 100%, so you should probably keep both cards. Also what is bad for your credit score is new credit, so getting anew card and closing your old one with good standing might not be the best approach.

You have had one credit on the system since October, to be honest that will make little difference compared to when you stop being a student and earn more money.

Be best if you could get a credit card from your own bank.

Original Poster

dereklogan7

Be best if you could get a credit card from your own bank.



Why? I see credit as credit, whoever is providing it

Taz1529

Why? I see credit as credit, whoever is providing it


Most bank credit card rates are 17 - 20% APR. Aqua and Vanquis are usually 60% + APR

If you have a 1/2 decent credit rating you should avoid these 2 like the plague

Original Poster

paul1005

Most bank credit card rates are 17 - 20% APR. Aqua and Vanquis are … Most bank credit card rates are 17 - 20% APR. Aqua and Vanquis are usually 60% + APRIf you have a 1/2 decent credit rating you should avoid these 2 like the plague



I have on record 6 months of clean borrowing on one credit card. I have 5 current accounts. I have a small paying part time job and a bit of money every week from family, but that's it. I can always ask my bank in a few months when my aqua card has come through, but I don't want to look desperate for credit getting another credit card so soon

Taz1529

I have on record 6 months of clean borrowing on one credit card. I have 5 … I have on record 6 months of clean borrowing on one credit card. I have 5 current accounts. I have a small paying part time job and a bit of money every week from family, but that's it. I can always ask my bank in a few months when my aqua card has come through, but I don't want to look desperate for credit getting another credit card so soon



Fair enough. If these credit cards will tide you over there's not much point in asking for a 3rd card from your bank - as you say it may end up doing more harm than good to your credit rating.
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