What is the purpose of a 100k limit on a credit card?

[jamesdwi]

I see people with these huge limit credit cards. What exactly does it get you if you aren’t Bill Gates or some celebrity, I understand if it’s a business with huge limits that’s one thing but everyday people brining home less than 200k a year. Even if you had an excellent rate of 5.9% APR and you charged just 30% of  your CL with a 100k CL card your minimum payment would be $1200 a month for the next 27 months even if you don’t track the minimum payment. I make good money and all, but $1200 is more than my weekly take home pay.  25% of my net monthly pay would still have me paying on the bill for more than 2 years and have paid over $2089 in interest.  We won’t even discuss how long it would take to pay if off if you get the penalty APR.  I guess some single IT people have 30k in the bank for that special purchase but I bet less than 1% of these high limit cards see more than 10% UTL max all year.

The whole putting cars and down payments on cards has been discussed here but I would think that is far from the norm for most people and if it’s just for the points, I would think the dealer would rather give you a 2% discount in cash and not have to run the visa signature card or your AMEX charge card with a 3.5% swipe fee for 50k

In general these cards just sound like a recipe for disaster.  Of course it compounds with high limits breed high limits.

[jsucool76]

A limit that high is only breeds disaster with an irresponsible card holder. Most people on these forums are pretty responsible, responsible enough to come here and research everything / get advice about cards and their situations at least.

A CL that high is useful for utilzation at least, and some people use their personal cards for business expenses and then get reimbursed by the company later. I mean wouldn't you love a 100k limit just for S&Gs? Doesn't mean you need to spend all of it at once :-)

[Ron6262]

    I have worked at 2 dealerships in Sales/Finance, both had a 2K limit on CC towards purchases.  We would occasionaly have the person with a AMEX or whatever want to put a car or motorcycle on his card, we would tell them 2K max on the card and that is it.  No way a dealership is paying a 3.5 fee for a large purchase unless they are marking it up and charging it back to the buyer.

[Crashem]

I have a card with 100k limit.  Kind of unique circumstance as it is palladium card.  Could have asked for even higher limit.  Just picked that number as I occasionally have some large expenses but no where near 100k but I didn't want to deal with asking for higher limit at some other point in time and 100k seemed like nice round number.   I don't think you see many normal credit cards with 100k.  Fact is cards over a certain limit don't even count for revolving utilization.  Anyone with really high limits likely knows how to handle credit.  Generally speaking I want limits that make my revolving utiL low even when I am using them.

[Crashem]

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@Ron6262 wrote:

    I have worked at 2 dealerships in Sales/Finance, both had a 2K limit on CC towards purchases.  We would occasionaly have the person with a AMEX or whatever want to put a car or motorcycle on his card, we would tell them 2K max on the card and that is it.  No way a dealership is paying a 3.5 fee for a large purchase unless they are marking it up and charging it back to the buyer.

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lots of other places to spend 30-50k.  Think jewelry.

[CK_Charles_Lover]

I'm sure most don't need a CL of 100K, but if you think about it most people in here like to keep UTIL under 10%. So if you only had 1 card (a stretch I know) and spent 10K on it you would be at 10%. Lots of people spend 10K, heck a family vacation or trip to Europe could do that. 

[Smug]

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@Crashem wrote:

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@Ron6262 wrote:

    I have worked at 2 dealerships in Sales/Finance, both had a 2K limit on CC towards purchases.  We would occasionaly have the person with a AMEX or whatever want to put a car or motorcycle on his card, we would tell them 2K max on the card and that is it.  No way a dealership is paying a 3.5 fee for a large purchase unless they are marking it up and charging it back to the buyer.

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lots of other places to spend 30-50k.  Think jewelry.

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What a waste.... Jewelry......lol

[CreditScholar]

It's possible to use a lot of that credit limit, depending on your circumstances. Every December I'll charge about 50k, with 30k of that being an insurance policy for my fiancee's ring. With other holiday expenses, it starts to add up quickly. I agree with previous posters though - if you have a CL that high, odds are you know how to handle credit. Banks aren't stupid. They don't give out CLs that high to people who don't have the assets to back it up.

[CreditScholar]

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@Smug wrote:

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@Crashem wrote:

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@Ron6262 wrote:

    I have worked at 2 dealerships in Sales/Finance, both had a 2K limit on CC towards purchases.  We would occasionaly have the person with a AMEX or whatever want to put a car or motorcycle on his card, we would tell them 2K max on the card and that is it.  No way a dealership is paying a 3.5 fee for a large purchase unless they are marking it up and charging it back to the buyer.

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lots of other places to spend 30-50k.  Think jewelry.

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What a waste.... Jewelry......lol

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It's not always a waste. Sometimes jewelry can appreciate in value quite quickly. In other cases they can serve as an excellent hedge against inflation/market turmoil in the same way gold and other hard assets do.

[Cdnewmanpac]

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@CreditScholar wrote:

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It's not always a waste. Sometimes jewelry can appreciate in value quite quickly. In other cases they can serve as an excellent hedge against inflation/market turmoil in the same way gold and other hard assets do.

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At least that is what your fiancée with the ring that requires a 30k annual insurance premium keeps telling you  

Seriously, my father in law makes frequent trips to the middle east for consulting work, often with little advanced notice. He once told me he spends upward of 30k/month on airfare alone. Since reimbursement often takes more than a month, he carries some high balances.Having a high limit card keeps him under 30% utilization, which he has chosen as a "safe" amount. He has several million in assets under management with the issuer's bank, as I believe is fairly typical for people with high limit cards.