"Toy" Limits - Huge Credit Lines, What's the Point?

[Appleman]

Correct. if you are not trying to maximize your scores, letting 50% of your CL report will likely not do any long term harm. As long as it is paid off month to month, credit cards can be a great tool.

I pesonally have a goal to get 800's across all 3 bureaus, so I micro-manage my reports.

[Anonymous]

Even if you PIF you can have a balance reported depending on when you PIF relative to when the creditor reports to the bureaus. 

I sometimes get myself in trouble with this as I PIF often a week or more early, then it's not reported until 4 days after it's due so literally there's almost a 2 week span after I PIF that could get reported.  Usually if I make a large purchase during this time I try to remember to log in and pay it off immediately, but sometimes I don't and am surprised when I see a balance (sometimes large) reported.  As long as the CL is high enough to keep that at 9% or less though, it doesn't impact my score.

Assuming you PIF every month and don't carry balances though, this is the only way I can see it negatively impacting your score IF you don't have a high enough limit to keep it at 9% or less.  Of course this would only impact your score for that month, as if it wasn't the case the following month ($0 balance reported) you score would just shoot right back up.  Personally, I'd just prefer the higher CL cushion just in the event that a balance does report, or there's always things that life could throw your way that cause you to not be able to PIF for some reason one month and you don't want to have to worry about your utilization % spiking any more than necessary.

[Anonymous]

Because bigger is better.

[Kutuzov]

As said the higher the limit the les % util you show on the CR and the higher your score. I myself try to every month if the cc does a soft pull to do s cli. Today I hit the Amazon sc, they rise my cl from 2k to 6k, my wife Kanes sc from 3k to 10k. What it means is a higher score for both of us since now the 1500 balance on Kanes sc at 0% interest till August is 15% util rather than 50%. And the Christmas shopping on Amazon also at 0% interest of about 600 now it's about 10% rather than about 30%. The more cl in a cc the less I got to micro manage it and can let it report and PIF at some point before due date.

[bada_bing]

There are several memes that are common here at MyFICO that don't make much

logical sense (at least to me).

One is the quest to grow limits beyond their utility. A lot of the justification seems to center

around the idea - at least subconsciously - that a credit limit is an asset - something you own

that has value because it is denominated in dollars. But you don't "own it", it is granted at the

whims of credit issuer and it doesn't have value in the strictest sense because to use it you

trade debt for the charge. A credit limit is a tool that allows you to more efficiently use the financial

power you have, it is not financial power ($$$) in itself.

Another is the idea that managing utilization monthly/weekly/daily all the time is important,

and by extension, big limits are useful to reduce utilization percentages. Utilization and a

FICO score in general is like Schrödinger's cat, in that it only matters when someone is

looking at it. There is a difference between maintaining personal finances in good shape - 

which will keep a FICO score up although that isn't the point of good personal finances - and

tweaking transient things like utilization to juice a score when there are no apps planned. A

high FICO score definitely has value but it seems strange that it is a point of vanity for some.

Of course, I'm not immune to any of my criticisms above. My lowest CL is $10K and I have a

couple at $50K. My FICO8 is 850 and I look at it a couple times a month admiringly, although

I haven't showed to any prospective lenders in over 2 years (made an application). 

[Anonymous]

Nice post bada_bing.  You make some very good points.

[Loquat]

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@Anonymous wrote:

Because bigger is better.

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Yea, what ^ said!  

[DoroLucky]

Because we're obsess with credit which translates to MONEY LOL

[Anonymous]

Well, ironically, "credit" almost always means "less money" if you really think about it.

[Kutuzov]

As I posted the more cl on a cc the less I have to worry about util. It only matters if I app but I rather know that I'm good all the time than having to wait a billing cycle and pay before close than plain apply.