Three months ago I applied for a credit card, the application was successful, but with a low limit on the available credit of £1,000. The bank stated that this would be reviewed after six months. I have no debts or mortgage and am on an above-average salary. Yet on reapplying to the bank to increase my credit limit, they refused, stating that they not only take into consideration my credit history with themselves, but also with outside institutions. They then stated that they would review my circumstances in six months. I know the banks are loath to lend at this time, but cannot understand their reluctance to increase the limit on my card from 1k to 5k. Any advice?

John Rice

Without looking at your credit report I can only give you general advice, but based on what you say I wonder whether your credit history might be a little thin. This could explain the bank’s decision to give you a relatively low credit limit to start off with and, assuming nothing much has changed since, their unwillingness to increase it at this stage. Perhaps the bank wants to wait for a few more months so it can be sure that their card is in safe hands – but if you need to higher credit limit now, that’s not much use to you. Many lenders are taking an increasingly cautious approach to risk and your experience does demonstrate the importance of maintaining a healthy credit history. Lenders not only check your record when you first apply for credit but also at regular intervals after that, while you remain a customer, to help them make ongoing decisions about your account. So take a look at your credit report as soon as possible to see exactly what is registered. You can see your Experian credit report for free if you register for a trial of CreditExpert. Once you’ve got your report, as well as checking to make sure everything is accurate and up to date, make sure your name appears on the electoral roll at your current address and that you’re not inappropriately linked to anyone else. If you do find a discrepancy, let us know and we’ll investigate it for you. However, if there aren’t any obvious problems, you could try applying for another card, as a different lender might be a little more generous, especially if you have an unblemished payment record on your newest card. Considering you’ll be using the credit card abroad, you should certainly shop around for a card that is cheap to use overseas. Follow the Compare and Buy links on this site to find the cards that don’t, for example, charge foreign loading fees. Be careful of falling into the trap of applying for multiple lines of credit. Lenders look very closely at the credit searches registered on your report and they are likely frown upon a glut of recent applications. So do your homework first and only apply once you’ve reviewed your credit history and found the card that best suits your circumstances.