What is the purpose of having a lot of credit?

[kdm31091]

If you have triple your income in credit all you have is access to a massive amount of potential debt that will take years and years to pay off. I just think people should be careful. Util util util CLI CLI CLI isnt the whole story

[Anonymous]

---

@kdm31091 wrote:
People go for the CLIs to lower utilization. More credit available equals lower util which is good. However some people really do go too far with it. On a fairly average income, you can only have so much credit. A 50k limit on one card is overkill and may raise eyebrows from lenders on future approvals. Credit limit vs income is something some people forget/ignore.

Number of cards is a preference. Some people like to maximize their reward on every single purchase. To me, it becomes a pain to spread my rewards around 5 or 6 cards which is why I primarily use 1 or 2 most of the time. Outside of spending ridiculously large amounts, I dont see how someone with 25 cards ends up with meaningful rewards on any of them. To each their own though.

I think the best approach is moderation. Get cards that benefit you and your spend. Ignore what is popular. For some people 3 cards is more than enough. Others really want 15 or 20. But the more credit is available to you, the higher the percieved risk can be, so dont go too crazy with CLIs IMO. It has downsides. Utilization is only one piece of the puzzle.

---

I totally agree with kdm.  It seems like sometimes people are racing to see who can get the highest CLIs, best cards, most popular cards, etc...I personally think is a disaster waiting to happen.  I also think i have way too many cards and that is why im not applyling for any other cards except for an AMEX a year from now and merging my capital one cards.  My retail cards are for my son and myself when buying clothes as we have those stores here in San Diego.

I have just above $50k of CL with $61k income and i think that is enough for me.  There are some people here who have well over 20 cards and have experience getting some cards closed by the banks because they have too much credit.  Choose and use wisely.

[kdm31091]

I think people do get addicted and it becomes a competition of sorts. They need to put their energy into something more productive. Credit isnt a game.

[black_citi]

I guess it can lead to a physiological issue for some people. They may think because they have access to so much credit they can spend willy nilly even with a high income. The national credit card debt sits around 800 billion. Some of that debt could be from people that make over 100k.

Is there anything wrong with that? TBH, I don't know. People have various reasons for why they get in debt. Me personally, at the time, my reasons were stupid. That's why Chase sees no value in me and wont give me anything. I don't blame them.

Quick story. Back in late 07 I went to my local Chase branch to open a savings account. After opening it, the branch manager checked her computer and noticed I was pre approved for their card. She said "let me get the paperwork so we can issue you your card". She didn't ask me did I want it but I didn't tell her no either. I had one other card, a Cap1 platinum with a $500 limit.

She gave me the paper work, told me I was approved for 5k and sent me on my way. And all I really wanted was a savings account. 2 years later I was 6k (yes 6k!) in debt with them on that card I didn't ask for or even know I was pre approved for.

Can that happen now with my 31k in credit? Yes. But I do what I can to prevent that. It can be a bit scary and intimidating for some, I definitely understand.

[Anonymous]

5 years ago i went to get the mail at my moms house, and my jaw dropped when a letter stamped with forclosure on the front. ummmm. what? she owns this hous **bleep**! apparently she stopped taking care of her finances years and years ago. and it was like 20k in backed taxes....i started taking on my mothers finances when she started getting sick. it was 3.5 years of backed property taxes. i was saving money anyways, so i could almost cover all of it at 7.5k, my two older siblings didnt help at all. i was 1k short and had never even attempted to get a credit card in 5plus years because i would just get denied for every store card. i had never borrowed from a bank, i had zero creditworthiness, and zero family that would help me take on my mothers burden. almost lost her house because of a measly 1k. i couldnt sleep at night, my stomach was in knots, having panic attacks, i cashed in some coins for 200 bucks. early withdrawl on a CD, made some returns for another couple hundred.

[Anonymous]

---

@black_citi wrote:
I guess it can lead to a physiological issue for some people. They may think because they have access to so much credit they can spend willy nilly even with a high income. The national credit card debt sits around 800 billion. Some of that debt could be from people that make over 100k.

Is there anything wrong with that? TBH, I don't know. People have various reasons for why they get in debt. Me personally, at the time, my reasons were stupid. That's why Chase sees no value in me and wont give me anything. I don't blame them.

Quick story. Back in late 07 I went to my local Chase branch to open a savings account. After opening it, the branch manager checked her computer and noticed I was pre approved for their card. She said "let me get the paperwork so we can issue you your card". She didn't ask me did I want it but I didn't tell her no either. I had one other card, a Cap1 platinum with a $500 limit.

She gave me the paper work, told me I was approved for 5k and sent me on my way. And all I really wanted was a savings account. 2 years later I was 6k (yes 6k!) in debt with them on that card I didn't ask for or even know I was pre approved for.

Can that happen now with my 31k in credit? Yes. But I do what I can to prevent that. It can be a bit scary and intimidating for some, I definitely understand.

---

Yeah, it can happen to anyone.  A lot of celebrities and athletes go to financial hardship.  Thank goodness for this forum which helps educate people, and i believe that was the purpose of creating it.  BUT, some of these posts i read are all about racing and competing against each other and daring people to apply apply apply.  Definately not good.  I can understand sometimes someone is encourage to apply because recently filing CH7 and want to get their financial life back on track but when doing it just because, is just...i dont even know what to call it lol, but not good i guess.

[Anonymous]

but that is why. i get credit when the times are good. this year i put mims taxes on my freedom card sitting 0apr still. and only paying 500 on it a month. this is the only time i have ever carried a balance, but i needed to get over some of my credit phobia. im a PIF girl, dont get me wrong, but whats the point of having any of this if it doesnt make your life easier during the hard times.

[longtimelurker]

While reporting is self-selecting, I haven't seen that many people get in deep trouble on this site.   Many have had previous credit problems, and perhaps focussing on chasing cards and CLIs is just fun, and has nothing to do with getting large lines that they then overuse

But I agree the util justification seems to me to be way overused.   As takeshi alluded to in passing, if you can PIF, you can always adjust util by paying before statement close, so having large limits in that case is more or less a convenience, allowing you not to micromanage, rather than anything particularly critical.   (And if you can't PIF on non-zero APR accounts, that's the first issue to address!)

[Anonymous]

---

@Anonymous wrote:
but that is why. i get credit when the times are good. this year i put mims taxes on my freedom card sitting 0apr still. and only paying 500 on it a month. this is the only time i have ever carried a balance, but i needed to get over some of my credit phobia. im a PIF girl, dont get me wrong, but whats the point of having any of this if it doesnt make your life easier during the hard times.

---

CCs can only help to a certain extend.  As long as you use them properly, life is good.

[ddemari]

---

@kdm31091 wrote:
I think people do get addicted and it becomes a competition of sorts. They need to put their energy into something more productive. Credit isnt a game.

---

KDM, you are 100% right and always have very realistic advice to offer. At first for me having multiple cards was nice because I spent a long time only having some subprime starter cards. Once the doors started to open for me, I started with 4 new cards early 2014. Then it was like I couldnt stop opening new cards, I wanted the new ones and the pretty ones. 

Then I wanted the cards for utilization buffers. Then I went back to wanting to just be approved for cards. Now I am at a phase where I am done chasing credit. I have 32 cards and LOT of available credit. Too much credit for sure. 

I am starting to channel my energy somewhere else, I just need a new hobby really bad. lol