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How much Credit Limit should one aim for?

Blogger

Re: How much Credit Limit should one aim for?


bs6054 wrote:

iPeaches wrote:

Dustink is right. Thats what my bankruptcy professor said on the first day of bankruptcy law in law school. It's one of the many ironies of credit. 

I think the question here is the meaning of adverse event.   Hiline is talking about large unplanned sudden costs, e.g. major operation without insurance, three major appliances blow up in the same week you crash the car etc.   Dustink is referring to job loss.

 

And in the job loss situation, getting 0% credit cards is hard to impossible (nearer impossible), in Hiline's case there is no difference as the banks don't know



Thanks for the clarification. Robot Happy

 


In case of a sudden job loss, I think you can still get by. You can make your case that the annual income to put on the credit card application should be as of the beginning of the year, or projected until year end. As such, the impact of the sudden income reduction isn't as significant.

Message 21 of 37
Valued Contributor

Re: How much Credit Limit should one aim for?


HiLine wrote:

bs6054 wrote:

iPeaches wrote:

Dustink is right. Thats what my bankruptcy professor said on the first day of bankruptcy law in law school. It's one of the many ironies of credit. 

I think the question here is the meaning of adverse event.   Hiline is talking about large unplanned sudden costs, e.g. major operation without insurance, three major appliances blow up in the same week you crash the car etc.   Dustink is referring to job loss.

 

And in the job loss situation, getting 0% credit cards is hard to impossible (nearer impossible), in Hiline's case there is no difference as the banks don't know



Thanks for the clarification. Robot Happy

 


In case of a sudden job loss, I think you can still get by. You can make your case that the annual income to put on the credit card application should be as of the beginning of the year, or projected until year end. As such, the impact of the sudden income reduction isn't as significant.


Yes, you could report income that way, but where they ask Current Employer, it is a little harder to avoid breaking Federal credit application laws!   "It's my current employer because I don't have a later one" might not fly...

Message 22 of 37
Blogger

Re: How much Credit Limit should one aim for?


bs6054 wrote:

HiLine wrote:

bs6054 wrote:

iPeaches wrote:

Dustink is right. Thats what my bankruptcy professor said on the first day of bankruptcy law in law school. It's one of the many ironies of credit. 

I think the question here is the meaning of adverse event.   Hiline is talking about large unplanned sudden costs, e.g. major operation without insurance, three major appliances blow up in the same week you crash the car etc.   Dustink is referring to job loss.

 

And in the job loss situation, getting 0% credit cards is hard to impossible (nearer impossible), in Hiline's case there is no difference as the banks don't know



Thanks for the clarification. Robot Happy

 


In case of a sudden job loss, I think you can still get by. You can make your case that the annual income to put on the credit card application should be as of the beginning of the year, or projected until year end. As such, the impact of the sudden income reduction isn't as significant.


Yes, you could report income that way, but where they ask Current Employer, it is a little harder to avoid breaking Federal credit application laws!   "It's my current employer because I don't have a later one" might not fly...


I don't remember exactly what fields are required on an application, but is Current Employer one of them? 

Message 23 of 37
Established Contributor

Re: How much Credit Limit should one aim for?


HiLine wrote:

bs6054 wrote:

HiLine wrote:

bs6054 wrote:

iPeaches wrote:

Dustink is right. Thats what my bankruptcy professor said on the first day of bankruptcy law in law school. It's one of the many ironies of credit. 

I think the question here is the meaning of adverse event.   Hiline is talking about large unplanned sudden costs, e.g. major operation without insurance, three major appliances blow up in the same week you crash the car etc.   Dustink is referring to job loss.

 

And in the job loss situation, getting 0% credit cards is hard to impossible (nearer impossible), in Hiline's case there is no difference as the banks don't know



Thanks for the clarification. Robot Happy

 


In case of a sudden job loss, I think you can still get by. You can make your case that the annual income to put on the credit card application should be as of the beginning of the year, or projected until year end. As such, the impact of the sudden income reduction isn't as significant.


Yes, you could report income that way, but where they ask Current Employer, it is a little harder to avoid breaking Federal credit application laws!   "It's my current employer because I don't have a later one" might not fly...


I don't remember exactly what fields are required on an application, but is Current Employer one of them? 


I recently applied for Discover and income is a mandatory field, but Current Employer is not a required field


Starting Score: EQ=665,TU=618 on Oct 9,2010
EQ=702,TU=725 on Apr 11, 2012 EQ=705 on Oct 31, 2012 Current Score: EQ=702, TU=714 on Dec 8, 2012
Goal Score: 750

Take the FICO Fitness Challenge
Message 24 of 37
Valued Contributor

Re: How much Credit Limit should one aim for?

 

Wow, that surprised me so I just checked a few places.  For Citi Forward and Chase Freedom, the apps don't seem to even have a space for it, for Fidelity Amex it is required field.  So I guess it's fine if you choose a card that doesn't require it.

 

But...  is there some other place they can get some verification of annual income?   Or do they really not care providing your current scores are ok?  Sounds dangerous to me!

Message 25 of 37
Valued Contributor

Re: How much Credit Limit should one aim for?

Smiley Happy

Message 26 of 37
Blogger

Re: How much Credit Limit should one aim for?


bs6054 wrote:

 

Wow, that surprised me so I just checked a few places.  For Citi Forward and Chase Freedom, the apps don't seem to even have a space for it, for Fidelity Amex it is required field.  So I guess it's fine if you choose a card that doesn't require it.

 

But...  is there some other place they can get some verification of annual income?   Or do they really not care providing your current scores are ok?  Sounds dangerous to me!


Out of the blue they can. If that happens, give them a copy of your most recent tax return forms. Man Wink

Message 27 of 37
Valued Contributor

Re: How much Credit Limit should one aim for?

By "Sounds dangerous" I didn't mean to the person applying, I meant to the banks (and thus I guess to all of us in the global economy).   Taking someone's word for income and making credit decisions seems a little like sub-prime CDO/credit default swap mentality of 2007-2008.   But probably not the greatest problem...

Message 28 of 37
Established Contributor

Re: How much Credit Limit should one aim for?


Dustink wrote:

HiLine wrote:

Actually if you regard credit cards as emergency funds, it's better to keep a low total limit on a regular basis, then apply for 0% offers when the adverse event happens.


Generally, when you need credit you can't get credit.


Such a true statement. 

 

Thanks to every one for the suggestions. I need work a lot on increasing my credit line over the period of time!

 


Starting Score: EQ=665,TU=618 on Oct 9,2010
EQ=702,TU=725 on Apr 11, 2012 EQ=705 on Oct 31, 2012 Current Score: EQ=702, TU=714 on Dec 8, 2012
Goal Score: 750

Take the FICO Fitness Challenge
Message 29 of 37
New Visitor

Re: How much Credit Limit should one aim for?

Hey guys!

 

I'm a long time lurker.  I'm 24 years old and this thread prompted me to sign up.  I currently have roughly a year's worth of income in available credit.  It just seems for some reason, every card I apply for lately I get what I consider a huge limit  for what my age.  For example, I got the US Bank Cash + and was given a $13,000 limit.  I have a high credit score, mortgage, never carry balances, blah blah blah.  Most of my expenses are reimbursed business expenses for travel, as I'm fairly frugal otherwise.  But sometimes I worry that I may end up with too much credit.  Then if I went crazy one day, I could suddenly have $70,000 in credit card debt in a very short time period.  

 

Does anyone think this is a valid concern? And if so, how do you handle it?

Message 30 of 37