HP v. SP?

[909]

Hi All,

I've read a number of threads and understand a good bit of the difference between HPs and SPs. What I don't understand is why some issuers grant plenty of CLIs using a SP while others require HPs?

Amex, BofA and CapOne all grant CLIs to me with only a SP (most recently, Amex gave me a $30K CLI) but Barclay, USBank and Elan require a HP. I'd love to buy a new MacBook Pro using my Barclay Apple rewards card, but the $2K CL means I'd make the transaction using two cards. I chatted with the supervisor at Barclay and he confirmed, the only way to get a CLI was with a HP.

Can anyone provide insight on why some banks require a HP? I use those cards far less because of their policies.

This is mostly a curiosity for me. Thanks for any enlightenment!

[Anonymous]

I would think those that require a HP probably feel that if the card holder is willing to give up that HP for a CLI that they'll be more likely to actually use the card more, thus creating a win-win for both the card holder and the creditor.  Creditors that grant SP CLIs are basically taking on more risk (through greater exposure) without necessarily getting anything more out of the card holder.  That's just one thought I have regarding this.

The debate has been ongoing for a long time as to whether or not CLIs should be given with SPs or HPs.  Traditionally the rule of thumb is that HPs are used when someone requests "new" credit.  It can be argued as to whether or not a CLI constitutes "new" credit.  Certianly it's not a new line of credit, but it is additional credit on an already existing line.  This can be equally argued both ways, IMO.

[909]

Thanks.

Loyalty and use could be considerations for the user, but the Barclay Apple rewards card is nearly useless to me (just a $2K limit, I never use it for anything other than the iTunes Store or Apple purchases and they've annoyed me by not offering a CLI w/out a HP). I'll likely cancel it after I get my next $25 gift card and use the cards that provide better service (SP CLIs, much lower utilization rates, etc.).

When applying for cards in the future, SP v HP CLI will be a consideration for me.

I'd love to hear other ideas why issuers do this.

[Anonymous]

Also another point.  By hitting gthe card holder with a HP and subsequent additional inquiry, they may be less likely to attempt to obtain or obtain credit from a competitor of whoever just gave them the HP CLI.  For example if someone was 4/24 and requested a HP CLI through Citi, that would put the card holer at 5/24 which could prevent them from taking on a Chase product.  I'm sure this example doesn't apply all too often, but it could.  One of the reasons we see fairly often for CC denials states "too many recent inquiries" - by a creditor using a HP they indirectly make it more difficult (ever so slightly anyway) for that card holder to obtain credit elsewhere which could in turn aid their profitability.