When you are looking to get a new 0% balance transfer credit card, it makes sense to have a look at your existing credit cards, and the credit limits you currently have on them.
When a credit card company is assessing your application for a new 0% balance transfer credit card, part of the process will involve looking at the existing lines of credit that you currently have available to you.
The credit card company will want to look at how much credit you currently have available to you. The card company will also consider how this available credit amount relates to your overall income.
Ever since the banking crisis began, the credit card companies have been stricter with their lending criteria . If you have a large amount of credit already available to you in relation to your income, then your chances of getting a new balance transfer credit card can be greatly reduced.
Less Credit Can Mean More
As an example you may have 3 credit cards currently, each with a £6000 credit card limit, giving you £18,000 in total credit available to you overall.
In this example, lets say your current income is £24,000 a year. Then even if you only have a £2,000 outstanding balance on only one of the cards, the credit card companies may take the view that you already have too much credit available, in relation to your annual income. In this case they are more likely to reject you for any new credit card.
In circumstances like the above it can often make sense to actually reduce your available credit, before you try to get a new credit card. You can cancel an unused credit card. Alternatively, you can ask the credit card company to reduce your existing credit limit. This will then reduce the available credit you have in proportion to your income.
You can cancel an unused credit card by contacting the credit card company. Simply write or phone, and tell them you wish to cancel the card. It is very important that you tell the card company in this way, rather than just cutting up the card. This is so that they can let the credit reference agencies know that your account has been settled. Once this has been done, your credit report will no longer show that you have that credit available to you.
It can take 30 days or more for your credit file to reflect the reduction in available credit. As a result, you should look to reduce any excess credit you may have available, sooner rather than later. Ideally, this would happen at least a month before looking for a new balance transfer credit card.
Read more of the latest credit card balance transfer tips from Balance Transfer Expert.