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Long time lurker, first time poster. Here's my current portfolio and my thoughts on obtaining so large limit credit cards (>40k) going forward for the next 2-3 years.
Credit Karma score: 788
Ex: 791
TU: 787
Eq: 801
No baddies, COs, lates, etc.
AAoA: 2yr 11m
Card / Balance / Limit
Chase Freedom: $825 / $30,000
NFCU Platinum: $3000 /$27,500
Best Buy Store Card: $0 / $18,000
NFCU Navcheck: $0 / $15,000
Lowes Store Card: $0 / $12,000
Furniture Row Store Card: $0 / $10,100
Chase Sapphire: $100 / $8,000
Macy's Store Card: $0 / $4,400
Annual Income: $78,000
Been with NFCU for primary checking, savings, navcheck, credit card, certificate, and auto loan for about 3 years now. Direct deposit setup with them. (love their remote deposit android app)
Been thinking of applying for their Flagship card which goes up to 80k on the limit and hoping that they give a good sized starting limit for it. Maybe around $15k-$20k. Take a year or two to get the CL increased to perhaps 30k? Then combine the CL from both NFCU cards together and hopefully get about a 60k limit on the Flagship. What are your thoughts on that? Pros and cons?
I'm thinking of doing the same with the Chase Freedom and Sapphire. I'd like to get the CL on the Sapphire up and then combine those two cards together and probably keep the Freedom. My Freedom card is 11years old and I don't want it closed out taking a hit on AAoA.
Is this a reasonable plan going forward, or are my expectations too high? Don't be afraid to tell me your straight up answer. Sugar coating not needed as I have a tough skin.
Why get cl that high? I personally growing my cl recently but keeping them around 30ish max
I always thought it was better to obtain higher limits for sake of FICO scores, however, my lack of knowledge on this area shows badly and any advice that can be given out on why not to go so high will be gladly taken in.
@riker20 wrote:I always thought it was better to obtain higher limits for sake of FICO scores, however, my lack of knowledge on this area shows badly and any advice that can be given out on why not to go so high will be gladly taken in.
I have never had higher then $25k so I only know what I have read, Credit Lines over a certain point, some debate on what that number is $40-$50k is what I read about most will no longer show as a revolving credit card, it will show as an installment I believe. Not completely sure how that effects your Fico if you had a sizable balance, but can't really think of why it would hurt you if you have other high limit cards $15-$30k that would still report normally.
Now I do know that higher limits is not going to help your score unless your Util. was REALLY high and then some high limit $0 balance cards could help counter that a bit. but you would still have scoring of each card by itself too.
So it sounds like cards over 40k may not report as revolving credit, but actually report as an installment. I'll do some googling to find out if that is good/bad for your FICO score.
Maybe I can work on the NFCU route with their Flagship card, but still keep the Chase Freedom/Sapphire at 30k and below.
It is not so much that it shows up on your credit report differently. After a certain amount (unclear as I hear 30ish to 40ish), the FICO formula itself removes the card from revolving util calculations. Normally high limits are good as it allows higher reported balances while keeping util low. But after the threshold, the card is treated as installment loan. This was originally done because of HELOCs which were ruining people's credit score as they were reflecting as revolving. Obviously this can change and has probably been changing in the past. My feeling is to get to 30ishK on cards until concrete evidence comes that they no longer do this anymore.
@riker20 wrote:So it sounds like cards over 40k may not report as revolving credit, but actually report as an installment. I'll do some googling to find out if that is good/bad for your FICO score.
Maybe I can work on the NFCU route with their Flagship card, but still keep the Chase Freedom/Sapphire at 30k and below.
Revolving utilization is one of the biggest effects on FICO. Lets say have two cards with 30k limit and 6k statement balance on one card for total utilizaiton of 10%. If suddenly you got CLI on one card to 45k and caused it to be removed from revolving util calculations, the 6k on the 30k would result in 20% util. You would probably lose 10-30ish FICO points over that (really depends on the current FICO score). Problem is since you can't tell by looking at report when they take a card out of util calculations, you basically have to guess and trip over the threshold and notice the FICO reduction.
@Crashem wrote:It is not so much that it shows up on your credit report differently. After a certain amount (unclear as I hear 30ish to 40ish), the FICO formula itself removes the card from revolving util calculations. Normally high limits are good as it allows higher reported balances while keeping util low. But after the threshold, the card is treated as installment loan. This was originally done because of HELOCs which were ruining people's credit score as they were reflecting as revolving. Obviously this can change and has probably been changing in the past. My feeling is to get to 30ishK on cards until concrete evidence comes that they no longer do this anymore.
HiJACK - Why do you have a Firestone Card??! Sorry if it actually makes sense for you but it is funny (in my mind) to be reading $23kk, $30k, $100k, Firestone $2.2k!
That bank has not seen a credit score above 600 in the last 5 years
I have one, but it's gone inactive long ago, never used it but they literally didn't decline anyone back 5+ years.
Thats a great way to look at it. Great explaination. Thank you for the insight. I'm always reading the posts on here and see you posting all the time. I figured you might chime in on this thread.
@Creditaddict wrote:
@Crashem wrote:It is not so much that it shows up on your credit report differently. After a certain amount (unclear as I hear 30ish to 40ish), the FICO formula itself removes the card from revolving util calculations. Normally high limits are good as it allows higher reported balances while keeping util low. But after the threshold, the card is treated as installment loan. This was originally done because of HELOCs which were ruining people's credit score as they were reflecting as revolving. Obviously this can change and has probably been changing in the past. My feeling is to get to 30ishK on cards until concrete evidence comes that they no longer do this anymore.
HiJACK - Why do you have a Firestone Card??! Sorry if it actually makes sense for you but it is funny (in my mind) to be reading $23kk, $30k, $100k, Firestone $2.2k!
That bank has not seen a credit score above 600 in the last 5 years
I have one, but it's gone inactive long ago, never used it but they literally didn't decline anyone back 5+ years.
I'd like to see a set of 4 firestone tires that cost more than $2200 for car!