CLs, are they ever enough?

[lexrjSD]

I don't even understand why lenders give ppl (including myself) that much credit. I would never spend half of my income (110K) in a month, how is that not consider a risk to lenders? I've always manage my debt (none) and credit very well but it's kinda of scary to think that if one day I decide to go crazy I could get into so much debt that would be inconceivable to pay it back. Don't you guys agree?

I've reached a point (very quickly to my surprise btw) where my total credit limit (56k - 4 cards) is WAY more than enough for my monthly spending (~4k) and is optimal for my avg total utilization (4%), with that being sad, should I continue to increase my credit limits (on my signature) or is it going to hurt me more than benefit?

[TRC_WA]

... and here I am content with $7k on a Visa.

Having been down the BK road one thing I have learned is it doesn't matter what your CL's are... you still have to pay it back.  You have more credit on one card than I have in my entire lineup... and I make about $80k.

I'm still not applying for more credit because I don't need it.  In my case, $22k worth of revolving lines is all I need.

[Shogun]

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@TRC_WA wrote:

... and here I am content with $7k on a Visa.

Having been down the BK road one thing I have learned is it doesn't matter what your CL's are... you still have to pay it back.  You have more credit on one card than I have in my entire lineup... and I make about $80k.

I'm still not applying for more credit because I don't need it.  In my case, $22k worth of revolving lines is all I need.

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1. You, my friend, are a genius.  One of the most intelligent posts I've seen on the boards.  Cheers to you!

[TwistedAngel]

It is a major risk for lenders, and it causes problems. Search the forums for AMEX balance chasing. When they started having financial trouble, they panicked started decreasing people's limits, including those with impeccable credit and a perfect payment history,  which angered many long time, (formerly) loyal customers.

Having ridiculously high limits is kind of a double-edged sword. Its nice to be able to run everything through your cards for rewards and whatnot without worrying about going over UTIL, provided you PIF every month. If you want another card, though, very high limits compared to your income can raise flags and be a reason for denial. Also, crap happens. People get into trouble, often through no fault of their own, and can quickly dig themselves into a deeper hole. Its easy to talk about self control and swear you will never use credit if you can't pay it back, until you are having to choose between having lights or having water, or choosing between having food and having gas to go job hunt. Even the best intentions and firmest resolve can go out the window if someone backed into a corner, and having a ridiculous amount of credit at a time when one is desparate doesn't always end well.

[watch44]

Well banks are in the risk business after all. There are people who who do burn them for lots of money. But most don't. That's why they charge AF's and interest on the rest of us. Insurance works on the same framework. It all works out, hopefully, if their models are accurate (mortgage backed securities being the latest anomaly, haha, wow) .

[Christina_xyt]

I agree it's a big risk.. Also never understand why people need so much credit? I think a 10k card with some other three or four cardsheight average 5k on each will be so enough for anyone...

[Shogun]

I've got more than enough to get me in lots of trouble.  I'm just gardening, if they want to give me a CLI, so be it, but that's it.   Unless a card comes by that really fits and benefits my needs, I don't need anything else.

[Mailak]

In my case, there is no relation between my spending and my credit limits. Getting a new card or higher limits causes no change in my spending, except perhaps I could distribute it differently. So, I'm never scared of using all of my available credit (even using 50% or 25%,would be an unmitigated disaster.)

When I had a grand total of $300 in available credit, my spending was still the same, just on a debit card. And after I started getting more cards with high limits, that didn't affect it either. If one lets income (and not available credit) guide spending and pay in full every month, it can be managed.

Having said that, the credit limits I now have are a bit crazy, as far as I am concerned! I almost wish lenders wouldn't give me anything more than a 10k card only because I don't like seeing those high limits. I keep expecting that at some point, some lender will say I have too much available credit.

[TRC_WA]

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@Shogun wrote:

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@TRC_WA wrote:

... and here I am content with $7k on a Visa.

Having been down the BK road one thing I have learned is it doesn't matter what your CL's are... you still have to pay it back.  You have more credit on one card than I have in my entire lineup... and I make about $80k.

I'm still not applying for more credit because I don't need it.  In my case, $22k worth of revolving lines is all I need.

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1. You, my friend, are a genius.  One of the most intelligent posts I've seen on the boards.  Cheers to you!

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Thanks!

Live and learn you know... I've got my profile where I want it to be.  Now I'm cruising in garden mode till April 2016.

[ways2go]

I have to agree, when is too much?  The past two months,  I've acquired 3 cards,  picked up an additional 22k.  NFCU gave me a 12k limit, when I got it I was like that is just crazy. Then I finally got the card that I've been wanting , an Amex Costco.  I shop there weekly,  so it'll get used.  Then I picked up the Amex ED.   So I now have a total of 11 open accounts for a total of 42.5K in total limits, my gross income is 46K, I'm thinking that is too much cL. I went bankrupt in '89 ,  didn't use any credit til about 3 years ago.  I paid everything in cash. Then within the past 3 years,  I have gotten 11 credit cards, and a auto loan.  I am currently using about 8% of my total credit.  I have enough in my savings to pay off the cc that I'm currently am using.  I don't plan on getting anymore or requesting any cli.  If they give them to me, that's fine.

I'm just wondering,  if I should close an account or two?  My oldest card is a cap one platinum, it has an AF of $39 with a 3,300 limit.  Should I close that account?   The only thing that gets put on it is my tivo. I've been thinking about just keeping it,  just out of loyalty to cap one. They were the first that actually gave me a credit card, and actually helped raise my credit score, when I basically had none.