Re: Can CLI kill your growth on prime cards?
10-13-2012 02:14 PM
Mostly the problem comes when apping for an installment loan like a home, the lender will not like to see a bunch of extra credit cards.
This is a myth, propogated by talking heads in the industry that think credit cards are evil.
Open, available credit is a good thing, as long as you've shown that you use it wisely. This type of thinking is for people that get all that credit and go nuts with it, buying things they cannot afford.
Available credit = positive
Used credit = negative
If somebody has $250k in limits but only a 60k income. The lender considers the question, what if they maxed everything out?
The point was mentioned that this question was aimed at people without a long established history. They won't get those types of credit limits when first starting out. You have to build up to it over time. Outside of a few conservative credit unions, I simply don't see people reporting getting denied for anything for having too much available credit.
Having said that, what I have seen many times is you reach your limit with a certain issuer. For example, Chase does this quite often. Someone has 3 chase cards with total limits of $50k. They apply for a new one, get denied because of the open credit with that issuer. You can call them and get them to move your credit around between the cards so that you now have 4 cards, but still $50k. They don't much care that you have $100k open with Amex, because even if you max'd out your Amex cards, Chase is still limiting you to screwing them for the same $50k. So while they will look at it, it matters much less than you think.