Credit Ratings When Living Off ISAs & Drawdown

[kempiejon]

Out of interest, is there a guaranteed way of getting your cc limit raised without asking for it?

I must have a dozen credit cards and most of them have a credit limit increase option via online servicing. Either decline, ask or apply automatically are the options I have experienced. Selecting the later would appear to be the ticket. Some of mine have moved up faster than others. I do regularly ask for an increases so that blurs the info I have gathered.
Do you have an aversion to asking? Most of my providers say it'll be a soft search and not affect my score. I do get turned down sometimes when I ask.

[Lootman]

Of the cards I have LLoyds gave me the highest credit limit. Also Halifax (part of the same banking group these days) also gave me a card and increased my limit without me asking for it.

HSBC are the stingiest with the limit (despite me being a "Premier" customer) followed by NatWest.

I am always asked for income, but never to prove it. I enter our household income since my wife still works.

Out of interest, is there a guaranteed way of getting your cc limit raised without asking for it?

I have plenty of debit cards, but my only UK cc is a Lloyds that I've had for at least 30 years and at the beginning, had a large limit. Many years ago after not using it -and forgetting all about it - the limit was reduced to only £1000. I rarely use it for more than £200, and that's just to keep it active, since I know that cards become dormant much faster these days.

I doubt that any method is "guaranteed". But when I have had credit card limits reduced involuntarily it has been when I chronically under-utilised my existing limit on that card. And when I was invited to increase my limit, it was when I had been using that card a lot, and paying it off of course.

As an aside I think it is quite useful to have one card with a low limit like £1,000. For car hires for instance where you worry that they might try and sting you for damage claims or traffic tickets. Or where you let someone borrow the card. Or other higher-risk activity.

[the0ni0nking]

My instinctive response would be that "non-normal" circumstances are best dealt with via a broker.

That would include those with non-PAYE income or those likely to want a mortgage term that would end beyond normal retirement age (or indeed start while in retirement!).

The fact of the matter would be that you are just as risky a borrower as any other - but most high street lenders use strict criteria around P60s etc if you are on the margins.

I've taken out 4 mortgages since 2016, and in none of those was I actually asked for proof of income. They were with HSBC, YBS and Principality. Shows what a joke the whole scenario is in reality.

As an example, the HSBC mortgage was for I think c£70k and at the time, I had savings and investments with HSBC that were greater than the mortgage. My salary has never been paid into my HSBC account but they nodded through the mortgage. Maybe AML and KYC crap has made that more difficult nowadays.

I have one mortgage due for renewal in August so will see what hoops I have to jump through to avoid ending up an 8.24% SVR as opposed to a much cheaper deal elsewhere.

[stevensfo]

Out of interest, is there a guaranteed way of getting your cc limit raised without asking for it?

I have plenty of debit cards, but my only UK cc is a Lloyds that I've had for at least 30 years and at the beginning, had a large limit. Many years ago after not using it -and forgetting all about it - the limit was reduced to only £1000. I rarely use it for more than £200, and that's just to keep it active, since I know that cards become dormant much faster these days.

I doubt that any method is "guaranteed". But when I have had credit card limits reduced involuntarily it has been when I chronically under-utilised my existing limit on that card. And when I was invited to increase my limit, it was when I had been using that card a lot, and paying it off of course.

As an aside I think it is quite useful to have one card with a low limit like £1,000. For car hires for instance where you worry that they might try and sting you for damage claims or traffic tickets. Or where you let someone borrow the card. Or other higher-risk activity.

But you could always lend the person a prepaid debit card where they can't use more than what is on the account.

Just for info, there is a Dutch bank called Bunq, that gives you a card that identifies as a credit card but works as a debit card. Trust the thrifty Dutch to think of that!

When hiring a car, I always use my Revolut card which is a prepaid debit card. Never had a problem.


Steve

[mc2fool]

Just for info, there is a Dutch bank called Bunq, that gives you a card that identifies as a credit card but works as a debit card. Trust the thrifty Dutch to think of that!

And the advantage of that is?

The other way round would be better. There's some things you can only use a debit card for and not a credit card, e.g. paying your taxes to HMRC, funding you stock broker a/c, buying premiums bonds (or anything else) from NS&I, etc.

[stevensfo]

Just for info, there is a Dutch bank called Bunq, that gives you a card that identifies as a credit card but works as a debit card. Trust the thrifty Dutch to think of that!

And the advantage of that is?

The other way round would be better. There's some things you can only use a debit card for and not a credit card, e.g. paying your taxes to HMRC, funding you stock broker a/c, buying premiums bonds (or anything else) from NS&I, etc.

The advantage is in situations where you may be asked to use a credit card rather than a debit card to reserve/book rooms/cars.

It looks like a credit card on the computer, but is actually prepaid and can be controlled from the app on your phone.

Steve

PS I realise that in Europe this is now changing as even with debit cards, the hotel/car hire simply debit a certain extra amount at the start, returned to you at the end.

[mc2fool]

And the advantage of that is?

The other way round would be better. There's some things you can only use a debit card for and not a credit card, e.g. paying your taxes to HMRC, funding you stock broker a/c, buying premiums bonds (or anything else) from NS&I, etc.

The advantage is in situations where you may be asked to use a credit card rather than a debit card to reserve/book rooms/cars.

I must be missing something here. A debit card can be kept "on file" to charge any extras just as a credit card can, and in both cases an amount can be "reserved" against the card without actually charging it and then later either that reservation released or an amount up to the reservation charged, so why the need to demand a credit card rather than a debit card for those situations?

[stevensfo]

The advantage is in situations where you may be asked to use a credit card rather than a debit card to reserve/book rooms/cars.

I must be missing something here. A debit card can be kept "on file" to charge any extras just as a credit card can, and in both cases an amount can be "reserved" against the card without actually charging it and then later either that reservation released or an amount up to the reservation charged, so why the need to demand a credit card rather than a debit card for those situations?

Good question!

As I said, in Europe there doesn't seem to be a problem any more with using debit cards. But when further afield, the hotels did want a credit card rather than a debit card.

Anything that gives us more control over who can access our funds must be a step in the right direction.

Steve

PS Though I'm sure that the banks are working on it!