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Help me understand the buzz behind CLI's

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Anonymous
Not applicable

Help me understand the buzz behind CLI's

It seems as if many people are obsessed with growing their credit limits and this is something I don't quite understand.  I'll preface by saying I have solid credit scores and most of my limits are fairly high (avg. around 5,000 with a few over 10,000).  I see people asking all the time about getting CLI's, dropping cards because of lack of CLI's, cards not showing them any "love" etc.  And I just don't get it?  Once you have a decent limit why the obsession over it continuing to grow?  I'm not being snarky, just trying to understand.  Short of massive purchase shouldn't our CLI's (assuming they aren't insanely low) be pretty irrelevant?  I pay off my cards multilple times a month and savvy credit users should be paying in full at the minimum as often as possible each statement cut (minus BT 0% stuff but let's leave that out for now). 

 

Is it people not wanting to pay multiple times in a month?  (Don't see why this is a big deal).  Is it just wanting to say you can put 25,000 on a card?  Especially for those with multiple cards (vast majority of us) it isn't as if you're not going to have enough credit to make certain purchases. 

 

It just seems as if something many people are really obsessed over and I don't get it. 

Message 1 of 131
130 REPLIES 130
Anonymous
Not applicable

Re: Help me understand the buzz behind CLI's

I like getting a pat on the head from credit card companies.

Message 2 of 131
mitchblue
Valued Contributor

Re: Help me understand the buzz behind CLI's

If you have a 50k card maybe a CLI doesn't matter. But for the lower limit cards, 5k or under they help .. For example, being able to spend more and stay with the 10% or lower utilization is big.

 

And having a 1k card and wanting to make a $1200 purchase isn't possible..

FICO® 8 Scores 821 FICO® 9 Equifax 826 (Updated 02-7-23)
Message 3 of 131
longtimelurker
Epic Contributor

Re: Help me understand the buzz behind CLI's

While I think they are really overstressed here, having to pay multiple times a month is a good reason for getting a CLI!    Financially (and not scorewise) the best strategy is to pay just once, on the due date.   Anything else is wasting a key feature of the credit card, the interest free float.    And then, having a balance that is only a fairly small part of the CL is OK for scoring too.

Message 4 of 131
Jansroom726
Regular Contributor

Re: Help me understand the buzz behind CLI's

While I'm done seeking new credit (108K credit on 45k income), I obtained it for these reasons:

 

- Having accounts with various lenders (Not putting all my eggs in 1 basket)

- So that I can charge without really having to worry about my monthly utilization rate

- In the event of a huge emergency, in theory I would have the ability for large purchases. (Still making sure to grow an actual savings account)

- To show creditors I'm capable of managing a large credit limit

- While I have requested my fair share of CLI's, most of them were actually automatic, or given high SL at the time of account opening.

 

I'm to the point where I'm afraid my lenders may reduce my lines or otherwise take AA - but I am prepared to fight my case with the reasons listed above.

 

Just my point of view. Smiley Happy

25 years old. Scores around 740. Income = 45K. Chase Car Loan @ 2.4%, AAOA = 2 years. Total Personal CL = 120k.
Message 5 of 131
Anonymous
Not applicable

Re: Help me understand the buzz behind CLI's

geoforce the need for people getting CLIs is WAY overrated. if you report no balances or between that 1-9% then it's really just not needed in many cases. if you need to pay more than once a month due to limit restrictions then it's understandable but if you use it all month and don't even use half of it then you should be fine. period.
Message 6 of 131
mitchblue
Valued Contributor

Re: Help me understand the buzz behind CLI's

Honestly, paying twice a month when you have only one-two cards might seem fine. I don't want to pay twice a month on 10 cards. Others who have 30-40-50 or more cards, would be a major hassle I suspect.. I just like to set it on autopay and forget about it.

FICO® 8 Scores 821 FICO® 9 Equifax 826 (Updated 02-7-23)
Message 7 of 131
Anonymous
Not applicable

Re: Help me understand the buzz behind CLI's


@longtimelurker wrote:

While I think they are really overstressed here, having to pay multiple times a month is a good reason for getting a CLI!    Financially (and not scorewise) the best strategy is to pay just once, on the due date.   Anything else is wasting a key feature of the credit card, the interest free float.    And then, having a balance that is only a fairly small part of the CL is OK for scoring too.


I pay multiple times a month because I want to, not necessarily because I must.  Why is it financially the best strategy to pay once?  If you charge 500 essentially no difference between paying 500 on the due date or paying 250 before it or vice versea. 

Message 8 of 131
Anonymous
Not applicable

Re: Help me understand the buzz behind CLI's

not many people spend more than twice a month on 10 cards and max them out those 2 or more times. your example is rather unrealistic
Message 9 of 131
Anonymous
Not applicable

Re: Help me understand the buzz behind CLI's


@mitchblue wrote:

If you have a 50k card maybe a CLI doesn't matter. But for the lower limit cards, 5k or under they help .. For example, being able to spend more and stay with the 10% or lower utilization is big.

 

And having a 1k card and wanting to make a $1200 purchase isn't possible..


Yes I can completely see them for low limits, but the vast majority of our consumer spend is going to be purchases that are under 5,000 a month easily.  And even if you spend 5,000 the opportunity to pay that in full and charge another 5,000 exists. 

 

I'm not against CLI's I just think it seems as if a lot of people take them very seriously  or become upset when they hit the "luv" button and don't get a big jump.  I admit I'm fortuante to have CLI's that easily cover all my spend but the obsession seems to be quite high around these parts. 

Message 10 of 131
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