Multiple Credit Cards - affect credit rating?

Some people will tell you yes, some will tell you no. Some people like myself will tell you that I've done it with several cards and had no problems.

yes

I'm not clear on this at all, but I have heaps of cards. I tend to take out new ones with special offers and just keep the old ones running. Some I never use at all and no-one ever seems to turn me down, though I haven't taken out any new ones recently.

I think other things are just as important, staying at the same address, being on the electoral roll having a longterm bank account etc.

Probably most important is a good repayment history. I always make payments on time and have a history of using credit when I need it but repaying it relatively quickly. I'm sure this helps my application.

Neb

Without a hint of irony, "AC" astounded uk.finance on 05 Mar 2004 by announcing:

Yes.

That depends entirely on the lender. Multiple applications in a short period of time are more likely to have an 'adverse' affect than those over a longer period. Also, your total liability has an effect. Close (or reduce the limit on) those you don't need/use.

Just keep applying until you're refused. Then wait 3 months or so and try again.

"Alex" wrote

Why??

The thinking is that they will be worried if you have access to huge amounts of credit.

It doesn't seem to matter with me.

I probably have credit limits of 2 and a half times my salary. Most of these accounts are dormant, but I could still spend on them if I can find the card. So not closing down the account has never seemed to have much affect.

I'm sure they would be much more worried if I was using it all.

Neb

"Nebulous" wrote

Why? - I thought credit card companies *wanted* people to keep a balance, so that they can charge horrendous interest on them!!

Surely as long as you were still paying all minimum amounts regularly and on-time, they ought to be very happy??

I think citizens advice's (or someones) guidelines suggest a maximum of 6 months pay in unsecured debt.

If I got up to 2+ years in debt it would be pretty apparent (to me at least) that I would never be able to repay it and meet all my other responsibilities as well.

So surely a lender would be more worried about that than the fact I have thousands and thousands in credit I never use.

Neb

"Nebulous" wrote

What if (say) you had enough equity in your house so that the unsecured debt would be covered, even if house prices fell by (say) 20% - and you were happy enough to pay cc interest rates on "2+ years" of debt for a short while, in anticipation (say) that some new business opportunities would take hold - and also willing, if worst came to worst and the business did not take off, to sell-up your house to pay off the mortgage and credit card debt ... ??

Could I convince a lender of that?

I have a fair bit of equity in my house, but I've also got a big family and we need a roof over our heads.

My business opportunities have never turned out as well as I thought/hoped they would. My last one took me about 6 years to get back to my starting point so I have come to the conclusion that I will need to be a wage slave for most of my life. So I'm not willing to do anything to risk my relatively stable position in the hopes of improving it.

I have a sort of settle for bread and butter today and tomorrow rather than bread today in the hopes of jam tomorrow position.

Neb

Yes.

The number of checks itself is not likely to be a problem unless you have lots (maybe 10+?) in a fairly short space of time, because that might suggest that you're desperate and/or intending to get lots of loans and do a runner. Obviously you need to keep the payments up, but in general a credit record with lots of credit all being paid on time is good rather than bad.

You might think that if you keep accumulating cards the companies would eventually decide that you've got enough, and some people suggest closing unused accounts, but if anyone has actually been turned down for another card they're keeping quiet about it! Certainly you seem to be able to collect a dozen or so cards with no problem.

Without a hint of irony, "Tim" astounded uk.finance on 06 Mar

2004 by announcing:

Total potential liability is taken into account, even if you don't actually have a balance on those accounts.

Mar

Are you sure? Have you seen my other posts? I have a potentially unmanageable liability, yet have never had a problem getting another card.

Neb

If I had 2.5x salary on credit card debts, the minimum payments would be more than my take home pay.

I think that would meet most people's definition of being in financial difficulty.

"Alex" wrote

Which lenders do you know that apply that rule?

"Jonathan Bryce" wrote

Not necessarily - have you not seen the minimum payment rules for MBNA? Basically, if you don't get "protection insurance", then you only need to pay that month's interest (which might even be zero!), plus 5!!! This should be easily within your take-home pay, even if the balance is 2.5x salary...

"Jonathan Bryce" wrote

Not if you have savings+income sufficient to pay (say) 18 month's minimum payments and a plan to sell your house if things don't turn out well enough after (say) 9 months....

1 x 2.5 x 0.299 = 0.7475. So if your tax/NI comes to more than 25.25% of your pay, and it probably does, then you are in trouble.

I'm aware than many cards quote an APR of less than 29.9%, but once you take out the effect of the interest free period, it generally seems to get back to pretty close to that level.

My Halifax card quoted an APR of 16.9%. However the "estimated interest" thing suggests it is nearer 32%.

Unless MBNA have changed since I left them, then the amount of advertising they force down your throat more than makes up for any advantages you might get from their minimum payment rules.

If my house was paid for using credit card debt, I wouldn't feel too comfortable.

"Jonathan Bryce" wrote

Try: 2.5 x (1.2408% x 12) = 37.2% for their standard rate (from website today - altho' some people can get a lower rate...). This is *after* any "introductory" rate - which is usually 0% for a while.

Tax/NI only needs to be less than 62.8% - likely?? :-)

"Jonathan Bryce" wrote

Look at the actual monthly rate they'll be charging after the introductory period. You must be going to the wrong credit card companies if you are accepting 29.9% standard interest!

"Jonathan Bryce" wrote

Are you sure this wasn't 1.5+ month's worth of interest?

Eg if statement date is 3rd of month, and payment due 28th of month, then: If you have a transaction on 4th January, it will appear on statement dated

3rd February and minimum payment is due 28th February. If you pay off in full, no interest is payable. If you only pay the minimum payment (as the "estimated interest" assumes), then you end up paying interest right from the date of transaction - 4th Jan to 3rd March (next statement date) is nearly two months interest being shown in the "estimated interest" figure ....

"Jonathan Bryce" wrote

Simply tell them firmly, but politely, never to 'phone you again. It worked for me! [The odd mailshot for a "cheap" loan, every month or so, is easily binned.]

I pay off my card in full every month, so I'm not too bothered about interest rates so long as I never have to pay them.

Cashback rates, however, are an important consideration. Halifax used to be quite good for that. They aren't any more, so I stopped using them.

It's for transactions evenly spread throughout the month

Didn't for me. I took my business elsewhere. That worked.

Along with the 15 pages of junk that come with the statement ... ... and the 1/2 page of junk *on* the statement itself.