Why so high on the credit limits?

[bfranklin825]

Ok, so I've been around the boards for a while now and I've been seeing a few posts here and there where either the post or the person's signature informs me that this person has something like 100k+ in credit limits with all their cards/LOCs...

My question is: Why does anyone need THAT much credit? Why would I need limits that equal or exceed my yearly salary?

I'm assuming that none of what I saw is business related (I could understand high limits for business activity)... so what gives?

[enharu]

Many reasons:

1. Some people have higher incomes.

2. Possibly business cards, or just personal cards that are used for business expenses, though some lenders may not like that.

3. People trying to pad CL so that their utilization will seem lower that what it ought to be.

4. Banks just trust those individuals, most likely due to their long credit history without any delinquencies.

[gstq34]

I don't know about others. I have been trying for CLI (soft pulls when possible) and new cards so that when I DO use credit or take a 0% for 18mo. offer (and actually USE the FREE money for a while) my UTL does not get hit so high and drop my scores.

[E150GT]

I dont need a high credit limit really beyond 5k so thats all I strive to get them to or close to. 

[bfranklin825]

---

@enharu wrote:
Many reasons:

1. Some people have higher incomes.

2. Possibly business cards, or just personal cards that are used for business expenses, though some lenders may not like that.

3. People trying to pad CL so that their utilization will seem lower that what it ought to be.

4. Banks just trust those individuals, most likely due to their long credit history without any delinquencies.

---

Well, personally I like high limits on cards that I like to use because I don't want to feel like I'm killing my UTIL when I use them for something, but I just don't understand (outside of business use) why someone would need to charge thosands of dollars at one time. A 20k limit on 4 or 5 cards seems like major overkill to me.

One of your reasons wasn't status... do you think some people like to have extremely high limits because they feel like it is some sort of a status symbol?

[enharu]

Status is a possible reason as well, but a more accurate description would be self-gratification, such as someone finally achieving his own personal milestone. However, no one will know whether a certain individual has a 5k CSP or a 50k CL CSP, unless he goes around advertising it for some reason.

It really boils down to personal spending as well. People with higher income has more spending power and tend to spend more in general. A few thousand dollars in spending, whether it is for clothing or for a meal, may just be considered as normal day-to-day expenses.

Some people are also somehow able to rack up most of their expenses, including rent and other big ticket items, on a credit card as well. So while their income may not be as high, a higher limit will be more beneficial to those individuals

[bfranklin825]

---

@enharu wrote:
Status is a possible reason as well, but a more accurate description would be self-gratification, such as someone finally achieving his own personal milestone. However, no one will know whether a certain individual has a 5k CSP or a 50k CL CSP, unless he goes around advertising it for some reason.

---

I know what you mean my self-gratification... I felt so good when I got my first 15k limit - I really felt like I was starting to "make it" in the credit game. My credit was destroyed in my younger and stupider years. I am so happy to be back to having good credit from the depths that I sunk to after my stupiditiy.

[Gunnar419]

---

@gstq34 wrote:

I don't know about others. I have been trying for CLI (soft pulls when possible) and new cards so that when I DO use credit or take a 0% for 18mo. offer (and actually USE the FREE money for a while) my UTL does not get hit so high and drop my scores.

---

+1

I'm not one of those with CLs over $100k, but my CLs do exceed my annual income. This recently enabled me to jump on a purchase (fixer house for four figures; I paid cash but used ccs and BTs for part of that) I would otherwise not have been able to make for fear of maxing out cards and making my credit look awful.

[HelpMe----]

I would really like to know how they even got over 50k in a cc......as someone who is starting to watch his credit and not have a single cc over 1000, it baffles me to see some with 50k or 100k in a single cc, then there are those few who have 7 cc with 100k each.......it's like WOW(jaw dropper) but it also give me motivation to get over my hump and pass the 720 score, and try to atleast get a card with 50k lol.......(first step, get a cc to 1k lol)

And is it posible to get a cc that is more than your annual salary?

[navigatethis12]

---

@HelpMe---- wrote:

I would really like to know how they even got over 50k in a cc......as someone who is starting to watch his credit and not have a single cc over 1000, it baffles me to see some with 50k or 100k in a single cc, then there are those few who have 7 cc with 100k each.......it's like WOW(jaw dropper) but it also give me motivation to get over my hump and pass the 720 score, and try to atleast get a card with 50k lol.......(first step, get a cc to 1k lol)

And is it posible to get a cc that is more than your annual salary?

---

Some lenders are more loose with credit than others. It's not really that difficult to reach high limits, though. If you have perfect history and low utilisation, you can get up to 25,000 very easily. Most will most likely require some sort of documents for 50,000 or 100,000, so people with those limits must have a higher income.

Most lenders have a certain amount of credit they will give relative to income. Some is 50%, some is 30%, and some is 20%. I reckon if you have a long histor with a lender, they may eventually give you more than your income on a credit card. However, you most likely would need to show assests that can support it and a very long and perfect history.