How can you tell when the limits are too high?

[lg8302ch]

The answer I gave myself is that if overall util of 5% is already more than my monthly salary!  To my surprise Chase and Barclays still approved with 10K each on my last two apps in June.... I know I could really get in serious trouble with my  CLs. 

[longtimelurker]

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@s_haliz wrote:

I had read comments here. I have a slight different opinion. For those who argued that there must be a set maximum amount (total CL)  in lender's mind that beyond which lender would not extend CC.

Let's assume for a moment it is true (I don't believe it is true). So person A applies to CC lender X. He/she has total available credit of say $120,000. Based on the information submitted, lender calculates that this person should be maxing out at $130,000 total CL, so approve him/her for just $10,000 CL on newly approved card. Person A is savvy and app spree determined. He/she does apply say 3 more cards and extends his/her limit by yet aonther $35,000 between these three new cards. Few days later he gets his AMEX increase of $15,000. Now his total CL is $180,000. About $50,000 beyond what lender X's max limit. Do you think lender will cancel his card now that he became too risky? I don't think so....    

Eventhough high overall CL may have some impact, I strongly believe its the utilization, your oldest CC with highest limit, thickness of your file and your income to the extent plays major role. There is no such thing as "high limit". Its all relative. 

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Well, whether or not you believe it, it actually happens (more with a particular lender first than overall CL).  You get decline reasons of the type "Sufficient credit for income".  I've got one (Citi CLI request) with almost 0% util, and several have been posted here over time.

And in your thought experiment, it usually doesn't happen that way, the lender makes the decision on the situation at the time, so they wouldn't normally track other issuers CL/CLIs except in periodic account reviews.  If there is no other bad indicator, I agree that they are unlikely to do a CLD (or cancel the card) in that situation, but they may certainly refuse a CLI or grant a card in the first place.

[Firehorse]

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@12njoy wrote:

It's all about discipline.  After having no credit cards from 2005-20012 when I got my first secured, I went on an app spree that I couldn't and still can't believe.  I've found myself paying credit cards twice whereas I have credit balances.  I'm a little paranoid too.

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One thing that helped me immensely is that I gave up on credit. I was one of those people, "If I can't afford with what's in my bank account I don't need it." I did this for 10 years.

Thing is, I do need a good profile and score. Once I realized, "Hmmm.... can't buy a house with cash," it changed my perspective. So I started cleaning up all the crap that had accumulated on my CRAs because I just didn't care.

What's happened now, because of only using a debit card for so long, is that I tend not to charge anything on my cards that I can't PIF. There have been exceptions for me. "Letting the balance ride." But that's mostly to make sure a card doesn't get flagged as inactive.

Discipline is key. And I hope that my experience continues as I gain more credit.

Edit: Typo