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Any downside to having big limits?

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kdm31091
Super Contributor

Re: Any downside to having big limits?

The main thing you can run into is lenders being wary of your exposure and not wanting to give you more credit. In some cases you can face adverse action and have limits lowered if a lender feels you are at risk of charging up a large amount that you can't pay. For that reason, I think it's a good idea to keep exposure moderate. Having a buffer for emergencies is nice, but having excessive exposure has no real benefit IMO, just makes you stand out and not in a good way.

Message 11 of 35
Burned2manybridgesB4
Valued Contributor

Re: Any downside to having big limits?

Prybar accounts are a good thing. Down the road you can look at the four digit cards, and say "see ya." When you hit $10k it's now a chase to $25k, then $40k cards... Never ends.

Message 12 of 35
Viva-LV
Frequent Contributor

Re: Any downside to having big limits?

I would concur with the replies here: nothing really to lose by acquiring more credit. I'm at $215 cl"s, which is almost double my income (I'd like to get to $250k). Haven't been denied an app because of too much available credit (yet). I'd recomend starting a relationship with a CU, like an Alliant or Penfed. Very good rates for all products. Congrats on your lines and good luck!

Am Ex | BOA | Chase | Citi | Disc | PenFed | USB | 400K Club
Message 13 of 35
longtimelurker
Epic Contributor

Re: Any downside to having big limits?


@Burned2manybridgesB4 wrote:

Prybar accounts are a good thing. Down the road you can look at the four digit cards, and say "see ya." When you hit $10k it's now a chase to $25k, then $40k cards... Never ends.


Why would you want to though?   What real-world benefit do you get with a $100K card vs a $50K one?   Or a CL of 10 x income vs 5?

 

tI can end at any time you decide "I have enough" or issuers decline to give any more.  

Message 14 of 35
Burned2manybridgesB4
Valued Contributor

Re: Any downside to having big limits?


@longtimelurker wrote:

@Burned2manybridgesB4 wrote:

Prybar accounts are a good thing. Down the road you can look at the four digit cards, and say "see ya." When you hit $10k it's now a chase to $25k, then $40k cards... Never ends.


Why would you want to though?   What real-world benefit do you get with a $100K card vs a $50K one?   Or a CL of 10 x income vs 5?

 

tI can end at any time you decide "I have enough" or issuers decline to give any more.  


As far as my stack, as the limits grow, the pile decreases. Not easy to get needed credit when you're in a bind. Sooner or later everyone's in a bind.

Message 15 of 35
Anonymous
Not applicable

Re: Any downside to having big limits?

You soooo right. I had to run up almost 20k in debt and i barley hit 20% on the cards i had. Now they are ALL paid off but the banks never called me or anything when i put 2k every month on for a year while only paying the minimum.
Message 16 of 35
takeshi74
Senior Contributor

Re: Any downside to having big limits?


@CF_Frost wrote:
I have about $45K income about three years history. I now have a $39,500 limit on my Discover and a $34,000 limit on my Amex due to generous lenders and soft pull CLIs.

It's not due to  generosity.  Creditors are not charities.  They're businesses.  They extend credit to you based on risk analysis and what they look at is your credit profile.  Your limits are due to your credit profile and your income.

Message 17 of 35
Anonymous
Not applicable

Re: Any downside to having big limits?


@takeshi74 wrote:

@CF_Frost wrote:
I have about $45K income about three years history. I now have a $39,500 limit on my Discover and a $34,000 limit on my Amex due to generous lenders and soft pull CLIs.

It's not due to  generosity.  Creditors are not charities.  They're businesses.  They extend credit to you based on risk analysis and what they look at is your credit profile.  Your limits are due to your credit profile and your income.


Not all creditors are alike. 

 

Banks want to pack their wallets fatter and fatter by making you pay high interest, fees, and gaining an interchange fee every time you swipe your card. 

 

Many credit unions offer cards with low to no fees, interest rates in the single digits, and make most of their money off of the merchant instead when you swipe your card. Many credit unions also cap the amount of money they'll let you borrow on a credit card (many state the limit, and it's usually not more than 40k or 50k). I couldn't imagine seeing anyone with a Navy FCU Card that has a $115,000 limit. 

Message 18 of 35
RCFL
Frequent Contributor

Re: Any downside to having big limits?

OP, did you put 45k as your income on the application or you put more than that? My income is higher but still stuck at 13.5k with Discover...
Message 19 of 35
Blackbeauty212
Frequent Contributor

Re: Any downside to having big limits?

Hoarding Credit is Bad ... and it can adversely affect your ability to borrow in the Future. There is a such thing as "Too Much Available Credit" 

 

* Most Mortage lenders will reject, request accounts be closed or limits reduced before allowing approval. 

 

* Credit Unions will decline or require strict manual review based on Available Credit. 

 

* Economic downturns like '08 puts a bullseye right on your back when Creditors come for Slashing Exposure. 

 

 

With that said 4 cards with High limits is not something I would worry about. However I still wouldn't go around app spree'ing, opening a bunch of new cards. IF you're going to open a new card, I would consider closing an existing one, especially if the Lender comes close or matches the current limit on your exisiting card so that your not adversely affecting your UTL score. 

 

I would much rather have just 4 cards with >20K limits, than say 10-15-20 cards to manage regardless of their limits.. I personally have a internal limit, I don't want any of my TL's >20K, there's nothing I need on a Credit Card >20K limit can't afford me. 

 

Don't get caught up in the Vanity that "CREDIT = INCOME" ... Too many people are vicitims of thinking the "More Credit I have, the More Weathly I am, the More Status I Have". You see it right here in this forum. No reason someone with $50K year income has 200K worth of Available Credit.  

Message 20 of 35
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