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

Re: Can CLI kill your growth on prime cards?


Dustink wrote:

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.

 


This is a myth, propogated by talking heads in the industry that think credit cards are evil.

 

Open, available credit is a good thing, as long as you've shown that you use it wisely.  This type of thinking is for people that get all that credit and go nuts with it, buying things they cannot afford.

 

Available credit = positive

Used credit = negative

Moderator
webhopper
Posts: 7,230
Registered: ‎09-16-2011

Re: Can CLI kill your growth on prime cards?

I have about 3 retail cards with low limits. They don't get used often.
I haven't had any problems growing my limit on my prime cards....

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Valued Contributor
Duncanrr
Posts: 2,841
Registered: ‎06-08-2012

Re: Can CLI kill your growth on prime cards?


webhopper wrote:
I have about 3 retail cards with low limits. They don't get used often.
I haven't had any problems growing my limit on my prime cards....
"with low limits" this isn't exactly what I was talking about. If I were a lender and saw a person with more available credit than income I would get worried. Granted, a long positive history could counter this. But my original question was more focused on people without a long established positive history.


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webhopper
Posts: 7,230
Registered: ‎09-16-2011

Re: Can CLI kill your growth on prime cards?

Well... with short history; creditors have to be worried more about bust out fraud....

Starting Score: 08/29/2011 TU 671 EQ 674
Current Score: TU 754 EQ 694 EX 697
Wallet: NFCU Visa Sig 25k, Amex Lowes 22k, NavCheck 15k, Amex PRG, Amex Zync, Discover It 13.5k, Amazon Visa 5k
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Valued Contributor
Dustink
Posts: 2,980
Registered: ‎10-02-2012

Re: Can CLI kill your growth on prime cards?

[ Edited ]

shadow2k wrote:

Dustink wrote:

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.

 


This is a myth, propogated by talking heads in the industry that think credit cards are evil.

 

Open, available credit is a good thing, as long as you've shown that you use it wisely.  This type of thinking is for people that get all that credit and go nuts with it, buying things they cannot afford.

 

Available credit = positive

Used credit = negative


 

 

If somebody has $250k in limits but only a 60k income. The lender considers the question, what if they maxed everything out?

 

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

Re: Can CLI kill your growth on prime cards?


Dustink wrote:

shadow2k wrote:

Dustink wrote:

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.

 


This is a myth, propogated by talking heads in the industry that think credit cards are evil.

 

Open, available credit is a good thing, as long as you've shown that you use it wisely.  This type of thinking is for people that get all that credit and go nuts with it, buying things they cannot afford.

 

Available credit = positive

Used credit = negative


 

 

If somebody has $250k in limits but only a 60k income. The lender considers the question, what if they maxed everything out?

 


 

 The point was mentioned that this question was aimed at people without a long established history.  They won't get those types of credit limits when first starting out.  You have to build up to it over time.  Outside of a few conservative credit unions, I simply don't see people reporting getting denied for anything for having too much available credit. 

 

Having said that, what I have seen many times is you reach your limit with a certain issuer.   For example, Chase does this quite often.  Someone has 3 chase cards with total limits of $50k.  They apply for a new one, get denied because of the open credit with that issuer.  You can call them and get them to move your credit around between the cards so that you now have 4 cards, but still $50k.  They don't much care that you have $100k open with Amex, because even if you max'd out your Amex cards, Chase is still limiting you to screwing them for the same $50k.  So while they will look at it, it matters much less than you think.

Established Contributor
Cdnewmanpac
Posts: 767
Registered: ‎01-16-2012

Re: Can CLI kill your growth on prime cards?

Actually, assuming no other expenses, someone with 60k in income could cover the minimum payment on 260k in debt, up to about 12% interest. Dti is calculated on monthly payments vs monthly income, not total owed. 

 

We also haven't mentioned assets. many people, even young ones, have assets that could be liquidated to settle debts, should a crisis occur. Finally, to the op, building big limits is a long term game. Nothing shows a bank you can be trusted with large limits like actually having large limits, regardless of source. If the only lenders willing to give you big limits are store cards, I still think you will be better of with those high limits than only low limits from traditional issuers.

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