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Valued Contributor
maiden_girl
Posts: 2,005
Registered: ‎12-29-2011

Re: Can CLI kill your growth on prime cards?

Well there is that problem with having too much available credit. If you were applying for a loan or something...a lender will ask that you close some of your cards to reduce your liability. I've heard of this happening before. With applying for credit cards however...I don't think they are as strict. They may see all your high limits and will either low ball you with their lowest CL or match your limits with a generous limit. I think its all YMMV.

The truth is out there...
FICO scores: 724 (EQ) 709 (EX) 711 (TU) 4/14 | Goal score: 750+ (all 3)
Tradelines: Capital One (5.0k) | Discover IT (5.0k) | Walmart Discover (5.0k) | Chase Freedom NPSL (7.3k) | Citi Simplicity (9.3k)
--------------------------Gardening until my credit recovers...NO MORE INQUIRES TIL 2015
Valued Contributor
Dustink
Posts: 2,980
Registered: ‎10-02-2012

Re: Can CLI kill your growth on prime cards?


nenuco wrote:

I posted a similar post not too long ago. I have always wondered about this. When asking for a new card, or asking for a CLI. I have to assume that lenders will consider the credit other lenders have already extended, when considering extending you more credit (sorry if that sounded confusing). Does anyone else have thoughts on the limits lenders may place?


I think asking for CLI's on cards that don't need them will lead to problems later. I think it is only best to get CLI's on cards that truely need them. If your limits always reflect your needs, there will never be a problem. When I see need I mean, a limit high enough to report low utilization.

 

Requesting a limit that is around 10 times your average monthly spend is perfectly logical and your banks will accept that if your credit is good.

 

So if you generally push $2,000 per month through your card, when your credit is in good shape a $20k limit would be reasonable.

 

Requesting high limits that will never be used is pointless and is a good way to get declined for a CLI on a card that needs it.

 

 

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:21    


     $14k          $8.5K          $7.5k          $7.5k         $6.5k             $6k             $5k            $5k             $5k              $5k           NPSL       @ 0%
Valued Contributor
Dustink
Posts: 2,980
Registered: ‎10-02-2012

Re: Can CLI kill your growth on prime cards?


maiden_girl wrote:

Well there is that problem with having too much available credit. If you were applying for a loan or something...a lender will ask that you close some of your cards to reduce your liability. I've heard of this happening before. With applying for credit cards however...I don't think they are as strict. They may see all your high limits and will either low ball you with their lowest CL or match your limits with a generous limit. I think its all YMMV.


+1

 

Agreed the biggest problem comes when apping for an installment loan.

 

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:21    


     $14k          $8.5K          $7.5k          $7.5k         $6.5k             $6k             $5k            $5k             $5k              $5k           NPSL       @ 0%
Contributor
nenuco
Posts: 228
Registered: ‎07-30-2011

Re: Can CLI kill your growth on prime cards?


Dustink wrote:

nenuco wrote:

I posted a similar post not too long ago. I have always wondered about this. When asking for a new card, or asking for a CLI. I have to assume that lenders will consider the credit other lenders have already extended, when considering extending you more credit (sorry if that sounded confusing). Does anyone else have thoughts on the limits lenders may place?


I think asking for CLI's on cards that don't need them will lead to problems later. I think it is only best to get CLI's on cards that truely need them. If your limits always reflect your needs, there will never be a problem. When I see need I mean, a limit high enough to report low utilization.

 

Requesting a limit that is around 10 times your average monthly spend is perfectly logical and your banks will accept that if your credit is good.

 

So if you generally push $2,000 per month through your card, when your credit is in good shape a $20k limit would be reasonable.

 

Requesting high limits that will never be used is pointless and is a good way to get declined for a CLI on a card that needs it.

 

 


+ 1 I think this a good guideline to follow. I first misread that line, thinking you meant: ask 10X your income lol 

Garden Mode... kind of... sort of (•‿•)
Established Contributor
Cdnewmanpac
Posts: 767
Registered: ‎01-16-2012

Re: Can CLI kill your growth on prime cards?

I disagree. The time to ask for credit is when you don't need it. Needs change and creditors are more likely to decline clis when there is an urgent need. Ask anyone who lived through Katrina or Rita or other natural disasters. Being able to float large expenses while waiting for reimbursement was crucial. My wife's total available credit sits about 1.5x her annual income and has never been asked to reduce her existing credit when applying for a new card. Having that large reserve has been very useful to us. I am still rebuilding from a bad 2006, but hope eventually to have around 100k available. Now whether or not you want such high limits on store cards is something I can't answer. I don't have any and don't understand why they are desirable, so will leave that to others. 

In wallet: Ink Plus 10k, AMEX TE 25k. In bag: CSP 16k, USAA WMC 15k, Hyatt 13k, United MPE 12k, AMEX HHonors 3k. In SD: Cap 1 QS 5k, Discover IT 7k. FICO 08 says my EQ is now 844, was 510 in 2010.
Contributor
nenuco
Posts: 228
Registered: ‎07-30-2011

Re: Can CLI kill your growth on prime cards?


Cdnewmanpac wrote:

I disagree. The time to ask for credit is when you don't need it. Needs change and creditors are more likely to decline clis when there is an urgent need. Ask anyone who lived through Katrina or Rita or other natural disasters. Being able to float large expenses while waiting for reimbursement was crucial. My wife's total available credit sits about 1.5x her annual income and has never been asked to reduce her existing credit when applying for a new card. Having that large reserve has been very useful to us. I am still rebuilding from a bad 2006, but hope eventually to have around 100k available. Now whether or not you want such high limits on store cards is something I can't answer. I don't have any and don't understand why they are desirable, so will leave that to others. 


Did you ever have to verify income? If you have any Amex's did you ever trigger an FR?

Garden Mode... kind of... sort of (•‿•)
Valued Contributor
Dustink
Posts: 2,980
Registered: ‎10-02-2012

Re: Can CLI kill your growth on prime cards?

[ Edited ]

Cdnewmanpac wrote:

I disagree. The time to ask for credit is when you don't need it. Needs change and creditors are more likely to decline clis when there is an urgent need. Ask anyone who lived through Katrina or Rita or other natural disasters. Being able to float large expenses while waiting for reimbursemhttp://ficoforums.myfico.com/t5/forums/editpage/board-id/creditcard/message-id/453959/is-draft/false/tab/htmlent was crucial. My wife's total available credit sits about 1.5x her annual income and has never been asked to reduce her existing credit when applying for a new card. Having that large reserve has been very useful to us. I am still rebuilding from a bad 2006, but hope eventually to have around 100k available. Now whether or not you want such high limits on store cards is something I can't answer. I don't have any and don't understand why they are desirable, so will leave that to others. 


I have on average about 6 months credit history, and my limits stand just over $20k.(to clarify that is a total) I understand the need to build up extra credit. To build up credit on store cards that will go unused is pointless though. It may prevent CLI's on prime cards.


Mostly the problem comes when apping for an installment loan like a home, the lender will not like to see a bunch of extra credit cards.

 

I still have a long ways to go before I can get my limits to 10 times months spend on an individual card. If you rotate your spending over time, limits will end up growing on your best prime cards.

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:21    


     $14k          $8.5K          $7.5k          $7.5k         $6.5k             $6k             $5k            $5k             $5k              $5k           NPSL       @ 0%
Established Contributor
Cdnewmanpac
Posts: 767
Registered: ‎01-16-2012

Re: Can CLI kill your growth on prime cards?

We have a mortgage, a car loan and I have an unsecured personal loan. Nobody ever asked us to close cards, reduce limits, etc. Because my wife was planning to change jobs the month we planned to close, we ended up putting the mortgage in my name only, but we were originally qualified as a joint mortgage. She does have an Ann Taylor card with some absurd limit (25k?), but the rest of our cards are standard issuers. Most of her cards are between 15 and 25k. Her only Amex (clear) has a 9k limit and is lowest limit card. She tends to carry balances, which Amex frowns upon. 

 

I think the big difference is that we are older (40s for me, late 30s, um, I mean 25 for her), have 20+ year employment history, both have paid off mortgages, etc. She has had the same citi dividend card since her student days, along with a WF card she opened her senior year in high school. She only has two cards that were opened in the last decade. The limits on her cards have grown steadily over time.

 

So your advice may very well be reasonable for young people just starting out. But having large limits on cards has only helped us and never even been brought up by any issuer or lender that either of us can remember. 

In wallet: Ink Plus 10k, AMEX TE 25k. In bag: CSP 16k, USAA WMC 15k, Hyatt 13k, United MPE 12k, AMEX HHonors 3k. In SD: Cap 1 QS 5k, Discover IT 7k. FICO 08 says my EQ is now 844, was 510 in 2010.
Regular Contributor
shadow2k
Posts: 108
Registered: ‎01-04-2008

Re: Can CLI kill your growth on prime cards?


nenuco wrote:

Cdnewmanpac wrote:

I disagree. The time to ask for credit is when you don't need it. Needs change and creditors are more likely to decline clis when there is an urgent need. Ask anyone who lived through Katrina or Rita or other natural disasters. Being able to float large expenses while waiting for reimbursement was crucial. My wife's total available credit sits about 1.5x her annual income and has never been asked to reduce her existing credit when applying for a new card. Having that large reserve has been very useful to us. I am still rebuilding from a bad 2006, but hope eventually to have around 100k available. Now whether or not you want such high limits on store cards is something I can't answer. I don't have any and don't understand why they are desirable, so will leave that to others. 


Did you ever have to verify income? If you have any Amex's did you ever trigger an FR?


My total credit lines are just under 1.5x my annual income. I've had Amex since 2007, no FR's and no concern about it ever happening.  Way too much fear of this if you aren't doing anything wrong, and nothing on your report to prompt it.  I've only had to verify income upon initial apps at credit unions, and that's standard.  And for the record, I've had two auto CLI's this year, one from Citi, one from Discover.

 

I've never been told I have too much available credit.  Credit card companies worry about that in the beginning.  Once you have high limits and have proven that you aren't going to max them out, it just makes it easier to get more credit.  

 

Now...keep in mind, I don't have sub-prime cards.  But the general idea is the same.  If you have large credit limits you don't max out, there's no reason to believe you'll do it on a different card (regardless of prime/sub-prime).  To me...getting told I have too much available credit would be a problem that can easily be fixed.  It's something that I know for a fact has positive effects, and the possible negative effects are small and easily fixed.  So I believe the pro's outweigh the con's of having huge limits, regardless of what type of card it is.

Regular Contributor
shadow2k
Posts: 108
Registered: ‎01-04-2008

Re: Can CLI kill your growth on prime cards?


Cdnewmanpac wrote:

The time to ask for credit is when you don't need it. 


Exactly.  


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