I have a credit card that I use for the same things each month, and pay off the balance in full by direct debit each month. My card issuer has just cut my credit limit to a quarter of what it was. I’ve spoken to them and I understand unfortunately they can do that, and why- an issue was flagged up to them by a credit reference agency.
I’m registered with 3 credit reference agencies, and only one has flagged this issue. However, in their ‘tips for improving your credit score’ I’m advised I could do better by applying for another credit card, my chances of being approved are ‘excellent’ and I could be approved for a credit limit of four times what it was originally.
It’s like they are saying, we think you are a bit more risky than before, but here, buy even more on credit and your score will improve! It makes no sense to me. Surely I would look like more of a liability? Should I really apply for another card?
Please can someone explain as though I’m five.