Does higher average credit limit mean anything?

[Anonymous]

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@SouthJamaica wrote:

Does having a higher average credit limit get you anything, like more or better offers, or higher starting limits, or anything?

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I think it used to be that way.  Especially with chase and Amex, they tend to meet or beat the limit on certain cards.  But its always YEMV.  For example my uncle had several cards and the highest limit was 8k. He never asked for increases. Basically any time he would apply for another card, it would be the same limit.  Then once he started using the cards more, eliminating debit card use, and asking for increases on schedule, the approval amounts didnt always beat the highest limit, or the limit of the oldest card, but the starting limit was much higher than 8k.

I'd say generally speaking, if your scores are good/great, with old credit accounts, high AAOA, low inqs, anything is possible.

But, for folks with less than 5 years of experience with credit cards, at least in my experience, a higher limit average does tend to result in future approvals having higher starting limits.

Chase for example, a year ago, did not like that I didnt even have a year of experience with a 5k limit major credit card, and it took several recon calls to get the IHG approved from the IHG/Hyatt app.  Nasa also approved me for a 20k limit visa but AA'd me due to too many new accounts, and rightfully so.

Amex only approved me for a 2k limit SPG a few months ago when it was at 35k sign on bonus... at the time my ED limit was 15, amtrak was 15, cap1 was at 5k.

But I do feel that as far as my CLIs go that they have went well due to micromanaging each account, trying to put usage through each card evenly, etc etc.

August 8th  will be interesting, that will be my 6 month mark from when my DC went from 3800 to 10k.  I am hoping to double it, but if not, no biggie.

My credit union also gave me a decent CLI after I had more cards with limits above 5k and low util.  Its all about timing, balance, etc.

I don't want this to sound too judgemental but I feel like at times we all get a little too pushy with credit limits.  Especially with store cards that don't offer promotional financing, and its just being used to pad utilization.  But hey, its all a part of the game, so call it what you want.  All I know is, once my SO and uncle got the carsons/bon-ton card up to 30k, it seems like every other card has went to that level.

[Anonymous]

This is exactly why I am taking it slow. My credit history is only 10 months old, but I'm after the high limits. I already have a 3k limit on my AmEx after starting with 1k. There are many reasons to want high limits, so I'd rather take it slow than go to Chase or something and get toy limits. I suppose it's hard when you are just starting out.

[SouthJamaica]

Thanks for the input folks.

I keep wondering whether I should ditch my Citi DC which has been stuck at $2600 since I opened the account over a year and a half ago, since it brings down my average credit limit. I would have no other reason for ditching it, so I'm wondering if that is a reason for ditching it.

[Anonymous]

I''m after high limits too. I'll try to bring all my card's limit to 20k. 

I feel like there's no point having 20 of 1K limit card. One 20k limit card is better. 

It's personal preference. 

[washpadude]

On a recent notice from NFCU, listed under "Key factors that adversely affected your Navy Federal credit score" was "Average credit limit of open credit cards reported last 12 months". NFCU is definitely looking at the credit limit of other accounts.

[Anonymous]

I think it's possible that having a higher credit limit from a prime card company can help you during an underwirting manual review. Just speaking from experience when I was trying to get an auto loan and they pulled my credit, I remember they had mention to me that the only thing I was showing was juggling " two small cards" in their words. This was before I started getting better cards and higher limits.

[joltdude]

Im going to add a datapoint to this thread.....

CU card I got a CL of 5000...

Waited almost 2 years for score to get up to (749-750)

Apped for my SECOND CC... Chase....

Guess what the CL was? 

5200.....

Coincidence?

Apped for a third card month later... Discover...

SL was 2500.....

Auto CLI + LUV after third statement from Disco.. 6800...

(now somewhere before the 5th statement its now 8300 with one denied LUV and then an approved LUV a week later)

I believe Chase directly tried to outdo my CU card.... (with that starter CL and the lowest published tier APR for that card)

Also Discover wanted to play ball.. But wanted to wait untill I was established with them (the post third statement) before offering up the prize...

_J

[Anonymous]

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@kdm31091 wrote:

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@SouthJamaica wrote:

Does having a higher average credit limit get you anything, like more or better offers, or higher starting limits, or anything?

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Obviously no one can truly answer this question other than with anecdotes, but I think it kind of goes both ways.

On one hand, excessive exposure can be a bad thing and cause banks to not want to give you more exposure. On the other hand, seeing you manage a limit responsibly may encourage them to give you a higher limit.

In general though I think we tend to read far more into these things than we need to.

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My profile got worse, AAOA went down, lots of inquiries, and new accounts.  As each card grew, it affected the increase on the other.  First was amex (obviously), then BOA, then Citi.

Then BOA, then Citi, then ended up witha 15k limit discover approval.  Pennies on the dollar change in scores.........

[Anonymous]

Yes, I think it means something.

1st, getting a higher limit does tend to make the next card also a higher limit. I have also gotten unasked for CLI.

BUT I fully believe every piece of info that can be deduced from your credit report means something to most banks, abet maybe different things to different banks/retailers though this won't be reflected in a score like FICO.

So IMO having a lot of store cards with very high limits Vs bank cards may result in similar FICO scores, I do think the details matter to many banks.

I am sure having a very high CL, say $500K total, and having a 9% util is judged differently from having 90K and 9%, even if scores and income look similar. But you will never know how this may figure into future decisions from banks. Just as I see that regular use of a few cards, PIF each month and show whatever balance will show due to the cycle, will result in a good FICO score but no or very few offers for new credit cards.

IMO FICO scores are more of a getting item, a go/no go first start, then other factors come into play, and it surely depends on what you are asking for, a car loan from a bank or dealer, or a new AMEX card with a high limit or getting spontaneous offers for new credit card deals.

[Anonymous]

When I think about getting rid of cards I don't use much, I consider that CL attached to that card.

So if there are two cards that I don't use much with similar rewards, one with a 1.6K limit, and one with a 14K limit, I would kick out the one with much lower limit first.

No doubt credit card issuers are aware of this, and IMO that is the reason higher CL tend to beget new cards with higher limits.  It's expensive to get new reliable customers, no one wants to lose a reliable customer over having a low limit.