HOW MUCH IS TOO MUCH AVAILABLE CREDIT? SOMEONE PLEASE INFORM ME

[Anonymous]

i have been reading some older post where they where talking about people being truned down for having to much credit for their income .......

some one please explain to me or give me their opoinion what is the right amount of credit for your income .......if your make 50k a year can you have 50k in availble credit?   or is that still too much?.

[takeshi74]

Depends on credit profile and creditor.  Everyone's credit is not the same.  Every creditor is not identical in what they're willing to extend to a given credit profile.  We can't tell you that $X its too much as there are way too many permutations of creditors and profiles.  The only practical way to find out is to bump into the limit.

Additionally, while income plays a role in determining limits it is not the only relevant factor.  One could be limited to a portion of one's income depending on credit.  However, there are plenty who have multiples of their income.  I'm roughly at 2x total credit.  Chase seems to be willing to extend about 50% of my income (was a higher percentage at the time I bumped into the limit).  AmEx seems to be willing to extend about 31% of my income but a CLI is pending and that may change.  Other creditors have been willing to extend less but for the most part they're newer tradelines.  YMMV.

[Anonymous]

reason why am asking am thinking of getting a car next year and i make 42k a year as of last week....and wanting to get a couple of venture credit cards to thicken my file ...but already have about 15k in availble credit with low utlization ...wondering what would be my stopping point ..dont want to pay a high intreast rate ..a secound rate lender    

[takeshi74]

That's a question for the creditor you intend to use.  We aren't underwriters for the creditors so, again, we cannot give you answer of $X.

Again, the terms you stand to qualify for aren't just a matter of your income and available credit but your entire credit profile as well.

[Anonymous]

thank you in for the advise ...am more comfortable with how it works now .....

[Berk]

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@Anonymous wrote:

reason why am asking am thinking of getting a car next year and i make 42k a year as of last week....and wanting to get a couple of venture credit cards to thicken my file ...but already have about 15k in availble credit with low utlization ...wondering what would be my stopping point ..dont want to pay a high intreast rate ..a secound rate lender    

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About two or three years ago I was making around 60K a year with around 80K in available credit with a 2% util rate. Now I am up over 150K in total trade lines wiht about 4% util and an income of about 120K a year. I have yet to be turned down for any new accounts or CLIs for any reason.

[Thomas_Thumb]

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@Anonymous wrote:

i have been reading some older post where they where talking about people being truned down for having to much credit for their income .......

some one please explain to me or give me their opoinion what is the right amount of credit for your income .......if your make 50k a year can you have 50k in availble credit?   or is that still too much?.

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 From a money management perspective, an aggregate CL between 50% and 100% of yearly income is a good rule for middle income. That typically allows a person the ability to maintain a low utilization without constraining spending. It also helps limit potential exposure.

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@Anonymous wrote:

reason why am asking am thinking of getting a car next year and i make 42k a year as of last week....and wanting to get a couple of venture credit cards to thicken my file ...but already have about 15k in availble credit with low utlization ...wondering what would be my stopping point ..dont want to pay a high intreast rate ..a secound rate lender    

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 Not sure how many cards you have now [I recommend 5 to 8] but, there should be no harm in adding a couple if you only have 3 [other than the hard inquiries].  As mentioned in the above posts, there is no magic # for credit as a % of income.

However, since you are soliciting opinions, I would set a max benchmark of 60% short term, get the new and then re-evaluate card acquisition/card CLI strategy.

P.S. Aggregate credit lines of 2x total income are not uncommon - but that generally requires having quite a few credit cards - likely 10 or more.