GangnamFICO wrote:If you're "floating" 25K, you're mismanaging your finances. If you're rationalizing it, you're mismanaging your expectations.
I look at it this way: I've been unemployed in the past, I'll be there again. 25K buys me a lot of time to find another job, or even having to retrain for a new one if things go really sideways (hopefully I'll be in front of that but life offers no guaruntees).
I would agree running up 25K in charges for everyday personal use on a typical median income, doesn't make much financial sense; however, there are extraordinary circumstances which could merit it... namely, I'd rather run up credit cards while I have a shortfall of income than either burn my assets / cash reserves / retirement, or default on other financial obligations. It also prolongs the possible walk from financial problems to financial ruin to a Ch 7 if push comes to shove.
That's my rationale for building aggregate credit limits and the Amex one individually. FICO scoring, sure can do that on $200 worth of limits, spending power, dictated by income for any financially conservative (savvy?) individual. Awkward things can happen though, and I'd rather be as prepared as possible.
Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)Current Score: EQ 660, Wally TU 697, EX unknown (05/13/13)
Goal Score: 680 in all three (01/01/14)
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