Increase card usage before requesting CLI?

[masscredit]

Those are decent increases for the limited use of some cards. I've been thinking that it might be harder to justify CLIs for some of my cards as the limits continue to climb. The normal monthly expenses that I run though my cards are about $700. Maybe more some months. I sometimes make other purchsaes that add to this. Those could be a few hundred or a few thousand dollars per month. Maybe that doesn't matter and they would provide a CLI anyway. I've read that CLIs have been declined because the cards weren't being used enough. I think heavy use might increase the chances of seeing an increase. I won't care as much once my credit limit goals are reached. 

[Ghoshida]

---

@masscredit wrote:

Those are decent increases for the limited use of some cards. I've been thinking that it might be harder to justify CLIs for some of my cards as the limits continue to climb. The normal monthly expenses that I run though my cards are about $700. Maybe more some months. I sometimes make other purchsaes that add to this. Those could be a few hundred or a few thousand dollars per month. Maybe that doesn't matter and they would provide a CLI anyway. I've read that CLIs have been declined because the cards weren't being used enough. I think heavy use might increase the chances of seeing an increase. I won't care as much once my credit limit goals are reached. 

---

In my experience, banks look at multiple metrices. Credit score (profile) and card usage are two of them. Is one of them more important than the other? Probably, and my bet is on the credit profile. 

I'm sure for each lender, there is possibly an absolute minimum on each of those two metrices below which nobody will get a CLI. Possibly, a particular CCC may say that even for people with 800+ scores, they won't offer a CLI unless a monthly purchase of $50 is made on their card (or that they use at least 10% of the card). Similarly, even if you spend $2k per month on a $3k limit card, and your score is 650, the CCC may not give a CLI. 

The thing is, the need for usage goes down with the increase in scores. And possibly income. Usage definitely helps, but in my experience it has had lesser impacts than the others.

[takeshi74]

As always, usage may help in some cases but the primary factors are credit and income.  Usage will not overrule those fators.  People receive CLI's with and without high usage.  However, people get CLI's and denials with high usage.  Usage alone will not determine whether or not one qualifies for a CLI.

[masscredit]

If a person has good scores and a decent income but only uses the card to pay the cable bill each month, what incentive would a CCC have to keep increasing the limit? 

Person A is noted above. Person B has the same income and scores but uses over 50% of the limit some months then pays it down. Neither one carry a significate balance. 

Would one person be more likely to receive a CLI or, a better CLI?

[Revelate]

---

@masscredit wrote:

If a person has good scores and a decent income but only uses the card to pay the cable bill each month, what incentive would a CCC have to keep increasing the limit? 

Person A is noted above. Person B has the same income and scores but uses over 50% of the limit some months then pays it down. Neither one carry a significate balance. 

Would one person be more likely to receive a CLI or, a better CLI?

---

Marketing or changing their 10Q metrics. 

There are always social and macroeconomic figures to factor in potentially with a lender's decision; they certainly apply to UW guidelines which underpin all of their decisions ergo they fit into this too.

Lenders look at so many things it's hard to make any explicit statement but to be blunt: limits are easy to achieve right now (even without resorting to store cards) so use the best rewards card for the job and go on with life.  I wrapped my arms around Amex as an example and did get 2 CLI's out of it, but they cut it off at the 3rd even with increased utilization so YMMV.  Card is still stuck there at 9K and hasn't been regularly used since.  I may take a flier just to test it depending what Chase says, but there's still internal bounds with any given lender regardless of how much you run through the card.

Beyond that the anecdotal experiences with the new look Cap 1 CLI policies are probably a reasonable guide, but YMMV.

[Ghoshida]

---

@masscredit wrote:

If a person has good scores and a decent income but only uses the card to pay the cable bill each month, what incentive would a CCC have to keep increasing the limit? 

Person A is noted above. Person B has the same income and scores but uses over 50% of the limit some months then pays it down. Neither one carry a significate balance. 

Would one person be more likely to receive a CLI or, a better CLI?

---

No straightforward answer. As I noted in my experiences above, I got decent increases without a significant spend; whereas, couple of years ago I was spending upto the limit on those cards and never paying interest, i.e. PIF after statement cut. Also, back then, I didn't know that paying "after" statement cut wasn't enough.

Anyways, I was simply making a case for increasing scores vs. increasing spend in order to get CLIs. That said, I'll present my views on this hypothetical A-vs-B analysis.

I'm making a few assumptions here: neither are in their initial months with the CC (no credit steps etc.); nor have they reached their internal ceiling vis-a-vis income (say 40-50%) with that CC. You also need to state whether both of them have the same limits as of now. I'll assume they do. I'll also assume a similar number of other cards and limits there. I'll explain later what might happen if I relax this assumption.

That said, if I was the CC, I'll look at many things: 

(a) prima facie, customer B spends more on my card, hence higher swipe revenue. I could reward B. A spends less on my card, and hence, no rewarding A. Then, B is more likely to get a CLI.

(b) however, B spends close to 60%-70% their monthly (declared) income on the CC, as I could see. Neither B nor A carry much balance on the other cards so I can't infer much there. However, it seems like B is living very close to their means, unlike A, who seems to be charging moderately. In the aftermath of any unfortunate event like layoff, job change, sudden big expenses, B is less likely to be able to stay on track compared to A. That way, B is more risky to me, under certain circumstances. I might not increase that risk. This is similar to the logic offered by CC's when they see high utilization on their card or other cards.

(c) B is already using my card; however, A is probably using other cards more. I could infer this using the income profile of the customers and their (speculated) expense profiles. I would like A to use my card more. This could happen if I give A a CLI (and throw in a few bonus offers, like 3% more rewards for the next 6 months). Remember, companies offer more rewards to target customers who're using others' products, and generally less to their own "loyal" customers. 

Now if I relax the assumption of equal number of credit cards and lines, if A has bigger lines than B, two things could happen: either (i) I could think that A already has enough from others and I don't need to give them more, or (ii) others have given A bigger lines so A must be a profitable customer for them, why not try getting A over to me? A's not probably using my card a lot because they want to pad utility which they could do with the other cards, so let me get a chunk of that spend.

These (and possibly various other what-if analyses) are done by CCs using different algorithm, which not only includes FICO scores, volume of usage, and income, but various other factors as well. Not all of them are available to us (unlike the basic big chunks of FICO but then again, a lot of it is proprietary) so it's difficult to say which way it'd go. It also depends on the bank's psychology. If I'm an aggressive lender, I might go all out on the guy who's not using my products that much and lure him with CLIs, occasional spend bonuses and what not. If I'm a conservative lender, I might follow a different path. 

So yeah, even with your very simple case study, it's difficult to say one way or another. 

I think OPs best bet is to try out whatever's within reach, follow good financial discipline, and hope for the best results. 

[Ghoshida]

---

@Revelate wrote:

---

@masscredit wrote:

If a person has good scores and a decent income but only uses the card to pay the cable bill each month, what incentive would a CCC have to keep increasing the limit? 

Person A is noted above. Person B has the same income and scores but uses over 50% of the limit some months then pays it down. Neither one carry a significate balance. 

Would one person be more likely to receive a CLI or, a better CLI?

---

Marketing or changing their 10Q metrics. 

There are always social and macroeconomic figures to factor in potentially with a lender's decision; they certainly apply to UW guidelines which underpin all of their decisions ergo they fit into this too.

Lenders look at so many things it's hard to make any explicit statement but to be blunt: limits are easy to achieve right now (even without resorting to store cards) so use the best rewards card for the job and go on with life.  I wrapped my arms around Amex as an example and did get 2 CLI's out of it, but they cut it off at the 3rd even with increased utilization so YMMV.  Card is still stuck there at 9K and hasn't been regularly used since.  I may take a flier just to test it depending what Chase says, but there's still internal bounds with any given lender regardless of how much you run through the card.

Beyond that the anecdotal experiences with the new look Cap 1 CLI policies are probably a reasonable guide, but YMMV.

---

Good point, Revelate. Lenders might be CLI-happy when the economy is doing well, just to encourage spending overall. As long as you're not playing havoc with your credit, you're very likely to get some sort of CLI. 

And as I keep reiterating, a denial from Cap One (after their 6 month mark) is only a proof of attempt. You use it to tell the EO that you tried. Then get the CLI from them anyway. 

[Ghoshida]

Off-topic, two somewhat-angry penguins one after another seem to throw me off a bit

[masscredit]

Ok.. a lot to take in here  I guess it comes down to use your cards, pay your bills and hope for the best when you want a CLI  

t must be nice to work deep in that credit industry. At a point that has the answer to questions like this. 

[Ghoshida]

---

@masscredit wrote:

Ok.. a lot to take in here  I guess it comes down to use your cards, pay your bills and hope for the best when you want a CLI  

t must be nice to work deep in that credit industry. At a point that has the answer to questions like this. 

---

And calling the EO when it's Cap One. 

Anyway they've been nice lately, so hopefully you'll see a decent CLI. 

Good luck.