Is this an insane amount of credit to be given on a store card?

[Zulor]

So I got a store card, simply to build up my credit rating. They gave me £200. 2 months later they informed me they have increased my credit to 2k. NOW, I get a letter stating they have increased my credit limit to £3750.
Why? It's a store card. There is not a hope in hell of me spending in excess of 3k in this store? What's the point?
I have spent maybe £400 pounds over six months in the store. Do they think I'm going to go mental over Christmas and spend thousands?
Not even my credit card company has increased my limit!
Will this reflect badly on my credit rating as it will look like I've applied for additional credit?

Your credit score will be affected by searches for credit, not an increased limit. It actually looks better to not be close to your maximum limit as well, so having an unused higher amount available to you works in your favour.

Do you pay back your credit every month in full? If not, you are already showing them that you're happy to spend beyond your means in their store.

I know a store who's credit limit tops out at £5000. You can ask for it to be reduced and to be opted out of any future automatic increases.

Does the store begin with A?

Is it Next? They have given me £5k despite me asking them to reduce it regularly!

Yes, it's Next. I've always paid back in full.

It's generally a good idea to reduce large limits to something more realistic. Even having unused channels of credit can count against your overall credit profile and the amount you can borrow should you want to take out a personal loan/extend your overdraft etc.

Thanks SpottingtheZebra. That's good to know at least!

They do it because, unfortunately, there are those who see an increased credit limit and increase their spending.

It's no issue unless you are shit with money.

I had this exact problem with them, regularly increasing it, finally up to £5k.
I had it reduced back down to £100 because I generally don’t need the credit but use it out of convenience at times. And then, a week ago, I ring to increase it to £250 (wanting to order a few bedsets to compare) and they said they ‘cant’ because it’s an automatic monthly review which they can’t control.

Next gave me 5k. Don't think I've ever had more than £100 on there. It's not a target.

Next done this to me, they gave me £5k I mean who would even spend that on a catalogue.

It’s bad for your credit rating to have loads of unused credit as it suggests you have the potential to go out of your depth with it all. I’ve just closed a NatWest credit card (£5k limit) for this reason.

Do they think I'm going to go mental over Christmas and spend thousands?

They probably hope you do.

If the store sells some big ticket items (jewellery or tech perhaps) then that might contribute to them offering the high credit limit.

Should I ask them to decrease it back to £200 then? I've one person saying it's good to have an unused limit, and another saying it's bad

@safariboot It's Next.

The way Next is going I’d struggle to spend £500 in there, let alone £5000.

However, if you aren’t one to over spend then don’t worry about it. If it’ll tempt you to spend more then reduce it to the amount you’d be happy to be in credit to them for. I have a few cards with balances like that, I’ve just remortgaged and it certainly didn’t affect my credit score.

It's generally a good idea to reduce large limits to something more realistic. Even having unused channels of credit can count against your overall credit profile and the amount you can borrow should you want to take out a personal loan/extend your overdraft etc.

Not true - your credit profile is incredibly complex - but a simplistic way of looking at it is your ratio of used credit to unused credit.

If you have a credit limit of 200, but have 180 used - you're at 90%

If you have a credit limit of 2000 but have 180 used, you're at 9%

Not true - your credit profile is incredibly complex - but a simplistic way of looking at it is your ratio of used credit to unused credit.

But some of them take into account the amount of credit already available to you when you try to take out more. I remember reducing my Dorothy Perkins store card (so this was a few years ago) when it had a stupid level of £12,000 because it already looked like I had loads of credit available already.

Best way to use a credit card is to use for purchases then pay off at the end of the month. Every application you do has different criteria so this might show badly for a credit card/store card application (if you pay off monthly you never pay any interest, therefore they make no money). If you are thinking of applying for a mortgage this looks good to them as it shows you live within your means and have had access to credit but not overspent. They are looking for someone who can manage their money well and pay x amount each month.
Unless you are getting any benefit to the store card (eg. Vouchers) I honestly would think about cancelling it. The practice of vastly increasing your credit limit without an assessment of what you can afford is fairly dodgy and they are doing it to maximise your temptation so you spend more, run up a bill and have to pay interest (which is usually very high). Also you already have a credit card so that is helping your credit score. Having access to so much credit shows a lender that you have potential to go out and spend 5k. And if you did and had monthly payments towards that would you still be able to pay your mortgage? If you do close the account down make sure you check your credit score a couple months after to make sure it's been done.