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Since i am rebuilding and at this point taking whatever i can get to re-establish my credit history....Can someone exlpain how and why someone gets stuck in low limit hell?
Just very curious
Cheryl
@Cheryla18 wrote:Since i am rebuilding and at this point taking whatever i can get to re-establish my credit history....Can someone exlpain how and why someone gets stuck in low limit hell?
Just very curious
Cheryl
Hi Cheryl.
Low limit hell happens when you open up a lot of accounts with low starting limits (i.e. Comenity Bank SCT) and then when you apply for accounts with the potential for growth, you are given low SLs. I have bank card accounts with limits ranging from $1500 to $5000 which is okay given my scores and income, but I could have just as easily gotten approvals with SLs of $300 and $500. For FICO scoring purposes you need 3 bank card accounts and 1 installment loan. Sometimes in the course of rebuilding (and I've been just as guilty) there can be an adrenaline rush when your getting approvals and not really figuring out what accounts to target for growth because after being turned down, it feels good to be approved, even if the approval doesn't fit into your long range credit goals.
Those low limits are there to put some greem marks on your reports, let it happen silly... just takes some more time
I'm not going to bash on low limits simply for the fact that most of us here make an average income ranging from 25k-60k. If you are above this, then you are the very few and this won't apply to you. Anything ranging from 1k-5k is plainly GOOD enough for your spending habits. Even at the 30% and under ulitization, you have enough money to spend. No one needs 20k limits on a billion cards in their wallet. Seriously, who are you? Bill Gates? Warren Buffet? OPRAH?! Are you really spending 70k a month? Now, I'm not talking about business personnel here. Just individuals. To answer your question, you have to start somewhere and depending on your income, that's how much they give you.
P.S. I know I'll sound like a hyprocrite since I have a credit limit of 15k on one of my cards. THANKS FOR POINTING IT OUT! I KNOW THIS. Still... it really annoys me when I see 20k plus of the sig and they have like a BILLION CARDS. Ugh.
@Anonymous wrote:
Why would you be annoyed at someone else's credit limits?
Because I secretly wish it was me...
I mean... I hope to have most cards at least 20k before too long, and as a full time student I'm only making about 54k per year right now. It's not about how much I spend on average, just nice knowing that if I want to buy a new tv or go on a trip I won't have to spread a big purchase over multiple cards or resort to activating and using a nasty debit card.
@Anonymous wrote:
@Cheryla18 wrote:Since i am rebuilding and at this point taking whatever i can get to re-establish my credit history....Can someone exlpain how and why someone gets stuck in low limit hell?
Just very curious
Cheryl
Hi Cheryl.
Low limit hell happens when you open up a lot of accounts with low starting limits (i.e. Comenity Bank SCT) and then when you apply for accounts with the potential for growth, you are given low SLs. I have bank card accounts with limits ranging from $1500 to $5000 which is okay given my scores and income, but I could have just as easily gotten approvals with SLs of $300 and $500. For FICO scoring purposes you need 3 bank card accounts and 1 installment loan. Sometimes in the course of rebuilding (and I've been just as guilty) there can be an adrenaline rush when your getting approvals and not really figuring out what accounts to target for growth because after being turned down, it feels good to be approved, even if the approval doesn't fit into your long range credit goals.
^^^^This, I totally agree with. Don't over do it on the SCT. However, my low limits cards with Comenity Bank has grown quite well over time. They were the first to give me a store card after by bk discharge..