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What am I missing?

Frequent Contributor

Re: What am I missing?


Redangler wrote:

I am still very new to the group, started here about a month ago. Let me say that there is a weath of info here and it has already improved my scores about 15+ points in last 30 days. Now, I understand the whole concenpt of available credit and usage but I am having a hard time understanding what the adantage is to lots of credit cards and available credit in the hundreds of thousands? Unless I hit the lottery or find a buried treasure in my backyard, I can see myself spending around $2000 per month on my credit cards and paying them full each month. So if I was able to build my credit to the point of 4 or 5 cards with a total of $80,000 to $100,000 SL, why would I need any more than that? Please understand that I am not trying to bash anyone but just not sure what the advantage is. Thanks again for this being a great resource!


You don't need more than $80 - 100K total line on 4-5 cards for the amount of money you regularly spend. If you are behave responsibly with your money and your credit (i.e. don't constantly apply for credit cards, don't churn, pay your bills on time, pay your bills off, etc...), they will be low maintenance.  You won't have to go through the rigmarole of timing payments before statement cuts, or making multiple payments, or thinking of ways to meet the spend requirement, or whatever other contortions I've seen on here.  And you won't have to constantly worry about adverse actions by credit card companies.

 

CC companies take adverse actions when they think a person has become a high risk:  already having super high limits but still aggressively looking for more credit (which is seen as potential debt) and all the while carrying a balance.  If over time you've demonstrated to credit card companies that you only spend what you can pay off, then if you occasionally go over limit, or occasionally carry a balance, you'll still be okay.