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Credit Line the higher the better

Member

Credit Line the higher the better

Hi, all. I have a question about credit line. I have a BCE with CL of $20,000 but the utilization is only 1% - 2%. Does it still make sense to request CLI? Does it help credit score or have other benifits? Thanks.

Message 1 of 11
10 REPLIES
Frequent Contributor

Re: Credit Line the higher the better

Hi!
I have a Chase Freedom with 23k, AmEx with 30k, and another Chase with 21k.
I think once you've reached about 20k, it's good enough for when you apply for other cards to get a nice SL. I know that when I apply for other cards my SL are pretty high.
Message 2 of 11
Valued Contributor

Re: Credit Line the higher the better


XManElite wrote:

Hi, all. I have a question about credit line. I have a BCE with CL of $20,000 but the utilization is only 1% - 2%. Does it still make sense to request CLI? Does it help credit score or have other benifits? Thanks.


If used correctly, having that high of a credit limit should be high enough, so IMHO no further CLI is needed.




TU fico08=820 11/10/17
EX fico08=812 10/25/17
EQ fico08=818 10/25/17
Garden since 4/5/2017
Message 3 of 11
Frequent Contributor

Re: Credit Line the higher the better

Many feel that with a high CL, new CC lenders will try to match or better that amount.

I however believe it has no effect. The credit limit received is a factor of the card your getting, the lender,

your income, and Fico. Want big get NFCU, small USBANK-Cash+.

 

A larger Cl will make it easy to keep Util low, however when you need to raise your Fico for a loan you

can manage Util with any CL.

 

A CL is just right if it is large enough to handle your spend, and easy to keep Util in check.

 

You will not find a lot of people getting AA, or credit line decreases, if they PIF, and don't push the CL limit.

 

To much credit can make a lender less likely to give you a card or maybe even receive a lower CL.

(IMO) You are best off if you keep reasonable limits on your existing cards.

 

I put between 2K & 3K / month on my most used card, and find 20K a reasonable limit.

Your number will vary depending on your spend.

I reduced 1 card to 20K and another to 15K at my request. (I don't want extreme credit limits)

 

I am sure I am a minority on this forum, "More is always better"

 

 

Message 4 of 11
Valued Contributor

Re: Credit Line the higher the better


Kforce wrote:

Many feel that with a high CL, new CC lenders will try to match or better that amount.

I however believe it has no effect. The credit limit received is a factor of the card your getting, the lender,

your income, and Fico. Want big get NFCU, small USBANK-Cash+.

 

A larger Cl will make it easy to keep Util low, however when you need to raise your Fico for a loan you

can manage Util with any CL.

 

A CL is just right if it is large enough to handle your spend, and easy to keep Util in check.

 

You will not find a lot of people getting AA, or credit line decreases, if they PIF, and don't push the CL limit.

 

To much credit can make a lender less likely to give you a card or maybe even receive a lower CL.

(IMO) You are best off if you keep reasonable limits on your existing cards.

 

I put between 2K & 3K / month on my most used card, and find 20K a reasonable limit.

Your number will vary depending on your spend.

I reduced 1 card to 20K and another to 15K at my request. (I don't want extreme credit limits)

 

I am sure I am a minority on this forum, "More is always better"

 

 


Yes, you are probably in the minority, but in this case I believe the minority is right. There has been a lot of AA taken lately by issuers against those with very high limits. Chase has been closing cards, while Capital One has been CLD cards...continually asking for unneeded CLI's is in my opinion poking the bear. Also the AMEX cards have a very high chance of FR if the limit exceeds 25k. I can not be more in agreement with you.




TU fico08=820 11/10/17
EX fico08=812 10/25/17
EQ fico08=818 10/25/17
Garden since 4/5/2017
Message 5 of 11
Member

Re: Credit Line the higher the better

I was just curious if it has other benifits. Looks I don't need extra credit line for my BCE. Smiley Happy Thank you all for your response.

Message 6 of 11
Valued Contributor

Re: Credit Line the higher the better


sarge12 wrote:


Yes, you are probably in the minority, but in this case I believe the minority is right. There has been a lot of AA taken lately by issuers against those with very high limits. Chase has been closing cards, while Capital One has been CLD cards...continually asking for unneeded CLI's is in my opinion poking the bear. Also the AMEX cards have a very high chance of FR if the limit exceeds 25k. I can not be more in agreement with you.


This FR discussion depends on what you think constitutes an FR.  When they started doing them back in the day it meant all of your accounts were suspended until you provided the requested documents whether your bank statements, paycheck, or a 4506-T.  These days some consider a 4506 request on a CLI to be an FR when their accounts weren't suspended for use until provided.  If you don't provide the 4506 on a CLI then nothing happens at all.  If you don't provide it under a suspension of ability to use the accounts you get them closed if you don't respond.

 

High roller limits are subjective based on your perspective and how you view finances.  If you're making 50K/yr then a 20K limit is probably fine.  If you're making 100K+ then you probably think a 50K limit is where you want to be.  Mostly around here though it's a split between people that are happy at $25K and those that chase the lender to see just how high they will go.  From experience you can usually pull off a $50K w/ AMEX without much use and providing a 4506 form to get it completed.  If you want to venture beyond the 50K mark then you'll need some significant use as was the case when I asked them for 150K based on their internal "rules" for a request being a max of 3X your current limit experience.  Due to not using it that much they threw me a bone of $700 more.  

 

There's also the rumor that anything 50K+ doesn't get calculated into your FICO when carrying a balance or something along those lines.  I can't really say that it is the case that this comes into play since I PIF on my due date and don't care to micromanage the accounts I have. Now if I can get Disco to budge upwards to 50K+ and see a difference in scores once that happens then there might be some validation if they go up.  I can't really see my scores going much further than where they are now though at 844 as of this month from Disco.  

 

It's nice to have the higher limits and not have to think about utilization much at all.  It's simple to just pick either a primary or secondary card for some cashback and not worry if it's going to breach a certain threshold on a larger purchase.  Charging that annual auto policy for $1500 barely registers any fico change for a month when it reports.  

 

There have been some recent reports on here with people that have Cap1 / Chase / BOA that have been slashed for non-use and some have been closed out for a variety of additional reasons.  The days of getting big approvals, getting the sign up bonus, and tossing it in the SD while keeping your buffer seem to be over for the time being as companies are going through their portfolio and cleaning up the riff raff.  

 

Short answer - It never hurts to have more credit than you need if you can keep it active every 6 months or so at a minimum to mitigate your chances of AA

Message 7 of 11
Valued Member

Re: Credit Line the higher the better


XManElite wrote:

Hi, all. I have a question about credit line. I have a BCE with CL of $20,000 but the utilization is only 1% - 2%. Does it still make sense to request CLI? Does it help credit score or have other benifits? Thanks.


 

 

Scores:

How's the CL and ulti % on your other cards or overall CL and util %?

If these are also low then it is highly unlikely for a CLI here to help with your score.

 

New cards:

I think it might help with other lenders (as when they pull you reports they will see the high CL, and if your income is also backing it they might give you higher CLs)

But it might also hurt with AMEX as lenders usually have an internal limit for you which if you let one card take more from it you increasing your chance of getting a toy CL or being forced to move CL to open new cards.

So if you are done with AMEX (i.e. no interest in foreseeable future to open other AMEX cards) it is probably better to ask for CLI, though the benefit is far from guaranteed.

 

spending:

It seems rare for most to face situations calling for payment over $20K using CC, let alone only one CC (i.e. you can't split $60K onto $20K * 3 cards) But you have to decide for yourself on this one (like, have you ever paid for something over $20K w/CC or W/O CC but could have used one?).

Utilization doesn't really matter much here even if you have to max one/more out as:

  1. if you are routinely making CC purchase of this kind of amounts you'd better have enough cash to pay it off the next day(otherwise you might soon starts to rack up interest rather than FICO points), and if so it will most likely not be reported.
  2. it is not quite feasible for most to get CLs that can actually 'stomach' this kind of amounts (i.e. to keep a 60K charge comfortably under 9% you are looking at a CL on the order of a million)

 

 

 

 

Message 8 of 11
Super Contributor

Re: Credit Line the higher the better

As one of the recent Cap One AAs, I suspect that it depends on perceived economic conditions.    In "bad" times, or where an issuer thinks things will degrade, there is pressure for CLs to justify themselves through earnings for the issuer.     High CLs with fractional usage become on obvious target (in my case, going from $35K to $10K might have risked losing me as a customer, but probably less risky than reducing 10 people each by $2.5K)

 

Now it's possible that a CLD will take you back to near where you were anyway, so maybe not much to lose, but my normal view of CLIs: what *really* is the value.   There are obvious cases where the CL is too small to be useful, so you have to pay several times a  month, but most CLIs here seem to "just because" with vague arguments to "utilization", and if this really is ever an issue, by a little extra work of paying early, you can fix util yourself.

Message 9 of 11
Valued Contributor

Re: Credit Line the higher the better

Doubling a 4k credit limit in my bubble is much more important than doubling a 10k to a 20k.

After the 5k mark lenders see it as a more responsible borrower. That is where traditionally visa signature is awarded, chase cards like sapphire are not offered until 5k.

Some lenders match existing limits, some never seem to, so the working theory with existing limits is to pump em up way past the limit you are after with a finicky lender. It does make sense for most part, until you are comparing apples to oranges with other members and receive a crappy limit with a higher score. C'est la vie
Open one, close three. Open one, close three.
Message 10 of 11