High credit limits

[Anonymous]

Hi everyone,
I'm fairly new here and in a sense to credit cards in general (although I've been using them for many years). I've been browsing around through various credit card forums and have noticed that people get really competitive and really excited over credit limits...which some of them are sky high.

Can I ask why? It can't be merely because it can improve your credit score, or is it? what is the point of having a $15,000 max?

In addition, going off on a tangent, why do so many people have such high reward cards with such high limits? Wouldn't it take forever to reach a reward?
I also get the impression that cc experts don't pay of their bill fully each month (but maybe leave a dollar or two)....true?

[kdm31091]

I don't really understand this part of the question "high reward cards with high limits to reach the reward" unless you mean rewards cards with high spending requirements for a bonus, in which case no, they don't make sense for everyone. You have to have that level of spending or else you're just spending extra to get a bonus which makes less sense.

People want high limit cards for utilization primarily. The less you use out of your available credit overall, the better. Now, I think the obsession sometimes goes a little too far with having 3x your income in credit limits, but that's not the common person here. Most just have a large buffer for utilization. Almost no one spends up to their limits, otherwise your score will tank.

I'm satisfied with my limits and don't feel the need to chase more.

[Anonymous]

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@Anonymous wrote:
Hi everyone,
I'm fairly new here and in a sense to credit cards in general (although I've been using them for many years). I've been browsing around through various credit card forums and have noticed that people get really competitive and really excited over credit limits...which some of them are sky high.

Can I ask why? It can't be merely because it can improve your credit score, or is it? what is the point of having a $15,000 max?

In addition, going off on a tangent, why do so many people have such high reward cards with such high limits? Wouldn't it take forever to reach a reward?
I also get the impression that cc experts don't pay of their bill fully each month (but maybe leave a dollar or two)....true?

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High limits serve two purposes.  One it increases your overall credit limit and therefore will lower your overall utilization which is a big factor in credit scores.  If you have a $3,000 balance on a credit card that only has a $5K limit your overall utilization on that card is 60% and May draw the attention of that creditor.  If your overall credit limit on your cards is $20k you still have a 30% utilization which isn't ideal.  Now if that $3K balance is on an overall credit limit of $75K your utilization is very small.  Overall higher limits allow you a lot more flexibility on how much you use the card.  

High limits on cards take time to get and are based in a lot of factors; income, credit score, limits on existing cards.

As for how much balance you should leave each month you will achieve the highest score if you pay all of your cards to $0 except one where you would a small balance at statement time and then pay in full by due date to prevent interest charges.

[Oslo]

I'd say it is all relative to an individual's income and spending habits.

I don't make much money ($30k) and as a college student my early 20's and I know I don't need a huge limit on my cards because I dont spend much and typically PIF every month.  However,  one of my closest friends makes around $200k a year.  In order to maintain his lifestyle and earn the best rewards he needs high limits to support his spending.

It is alsp good to haven higher limits than you need it you want to keep your utilization down.  That's a huge factor in determining your credit score.

[Anonymous]

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@Anonymous wrote:
Hi everyone,
I'm fairly new here and in a sense to credit cards in general (although I've been using them for many years). I've been browsing around through various credit card forums and have noticed that people get really competitive and really excited over credit limits...which some of them are sky high.

Can I ask why? It can't be merely because it can improve your credit score, or is it? what is the point of having a $15,000 max?

In addition, going off on a tangent, why do so many people have such high reward cards with such high limits? Wouldn't it take forever to reach a reward?
I also get the impression that cc experts don't pay of their bill fully each month (but maybe leave a dollar or two)....true?

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Everyone is different. I just did a spree and set an arbitrary goal of going over $250K in total limits (made it). Outside of the utilization percentage it serves little purpose since I won't run up more than a small fraction of that. It was mainly done for entertainment.

Personally I pay off my balances in full every month.

[longtimelurker]

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@Oslo wrote:

I'd say it is all relative to an individual's income and spending habits.

I don't make much money ($30k) and as a college student my early 20's and I know I don't need a huge limit on my cards because I dont spend much and typically PIF every month.  However,  one of my closest friends makes around $200k a year.  In order to maintain his lifestyle and earn the best rewards he needs high limits to support his spending.

It is alsp good to haven higher limits than you need it you want to keep your utilization down.  That's a huge factor in determining your credit score.

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But, assuming you can pay in full (and if not low APR is more important than CL), utilization doesn't need to be an issue.  Just pay before the statement cuts and you can make your utilization anything.  So in this model, high CL saves you the slight hassle of doing this (and in higher interest environments some earned interest) but not really critical to credit score.

[Oslo]

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@longtimelurker wrote:

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@Oslo wrote:

I'd say it is all relative to an individual's income and spending habits.

I don't make much money ($30k) and as a college student my early 20's and I know I don't need a huge limit on my cards because I dont spend much and typically PIF every month.  However,  one of my closest friends makes around $200k a year.  In order to maintain his lifestyle and earn the best rewards he needs high limits to support his spending.

It is alsp good to haven higher limits than you need it you want to keep your utilization down.  That's a huge factor in determining your credit score.

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But, assuming you can pay in full (and if not low APR is more important than CL), utilization doesn't need to be an issue.  Just pay before the statement cuts and you can make your utilization anything.  So in this model, high CL saves you the slight hassle of doing this (and in higher interest environments some earned interest) but not really critical to credit score.

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Correct.  

[iwazl71]

I like having 3 or 4 high limit cards for BT purposes,   Usually when I do my vacation planning, I will charge the tickets, hotels, etc on the cards with the most beneficial rewards.  Then BT to 1 or 2 high limit cards.  I have 4 cards with 50k+ that I will BT to and pay off within 6 months.  never more than 15% to any one card so I dont get dinged on the untilization.

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@Anonymous wrote:
Hi everyone,
I'm fairly new here and in a sense to credit cards in general (although I've been using them for many years). I've been browsing around through various credit card forums and have noticed that people get really competitive and really excited over credit limits...which some of them are sky high.

Can I ask why? It can't be merely because it can improve your credit score, or is it? what is the point of having a $15,000 max?

In addition, going off on a tangent, why do so many people have such high reward cards with such high limits? Wouldn't it take forever to reach a reward?
I also get the impression that cc experts don't pay of their bill fully each month (but maybe leave a dollar or two)....true?

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[Anonymous]

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@Anonymous wrote:
Hi everyone,
I'm fairly new here and in a sense to credit cards in general (although I've been using them for many years). I've been browsing around through various credit card forums and have noticed that people get really competitive and really excited over credit limits...which some of them are sky high.

Can I ask why? It can't be merely because it can improve your credit score, or is it? what is the point of having a $15,000 max?

In addition, going off on a tangent, why do so many people have such high reward cards with such high limits? Wouldn't it take forever to reach a reward?
I also get the impression that cc experts don't pay of their bill fully each month (but maybe leave a dollar or two)....true?

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I would add that I do take seriously having a reasonably high CL on a couple of low interest ( under 8%) cards in case of emergencies or when I have to carry a balance.

It's nice when something comes up like unexpected vet bills of a couple grand. One of the side effects of adopting senior rescue dogs. The last one had his own opthamologist.

[iwazl71]

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@Anonymous wrote:

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@Anonymous wrote:
Hi everyone,
I'm fairly new here and in a sense to credit cards in general (although I've been using them for many years). I've been browsing around through various credit card forums and have noticed that people get really competitive and really excited over credit limits...which some of them are sky high.

Can I ask why? It can't be merely because it can improve your credit score, or is it? what is the point of having a $15,000 max?

In addition, going off on a tangent, why do so many people have such high reward cards with such high limits? Wouldn't it take forever to reach a reward?
I also get the impression that cc experts don't pay of their bill fully each month (but maybe leave a dollar or two)....true?

---

I would add that I do take seriously having a reasonably high CL on a couple of low interest ( under 8%) cards in case of emergencies or when I have to carry a balance.

It's nice when something comes up like unexpected vet bills of a couple grand. One of the side effects of adopting senior rescue dogs. The last one had his own opthamologist.

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That's pretty awesome of you.  I wished more people adopted dogs vs buying from puppy mills.