Beneficial to decrease credit limit?



Just wondering if I’m thinking along the right lines here…

Card #1 – Asda Cashback £4000 limit, very low balance set to pay full amount via DD

Card #2 – Virgin Money £2600 limit 0% purchases for 26 months, £700 balance set to pay min amount via DD

I originally applied for the Asda card after moving into a rented flat to earn some cashback + S75 on larger purchases and also for everyday spending, initial usage of this was £1-2k/month but now unless there’s sudden unexpected costs i’d expect it to only hit a balance of £250-£500.

I also recently applied for the Virgin Money card to free up some of my savings to take advantage of current account interest rates, I’m also able to pay off the Asda card with this, so gaining both cashback and 0% on the same purchases, the Asda card doesn’t take the DD if full payment is made via the Virgin Money card so this works out well.

Going forward obviously I’ll hit the limit on the Virgin Money card long before the promo rate is over and I feel the high (for me) limit on the Asda card both reduced the limit I could’ve received on the Virgin Money card as well as affecting it in the future if I request a limit increase.

For clarity I’m earning minimum wage below £16000, my rent is around 30% of this and before these 2 cards I’ve had no true credit history due to being a lodger, using a PAYG phone and having no overdraft on my bank account etc etc.

Would it benefit me to drop the Asda card to a £2000 limit to theoretically give Virgin (or another lender if it comes to it) more ‘breathing space’ when I request an increase in limit in a few months?

If so is it best to do this now so it fully propagates across CRAs for when the time comes to request the increase?

I’m aware this will increase my reported utilization a fair bit especially as the 0% card balance grows but I don’t foresee applying for anymore credit anytime soon (outside of bank switches) and I have plans to renew my tenancy for 12 months so no mortgage plans anytime soon.


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