topic Re: High scores plus low income equals stagnant? in Credit Cards

High scores plus low income equals stagnant?

mzgg09 — Tue, 16 Jun 2015 01:19:09 GMT

I was just wondering and thinking about something when it comes to major credit card limits. You work hard to get high scores so that you can get good credit. And in turn you hope that this good credit earns you some high limit cards. But what do you do when you have the score to get high limit cards but not the income to support? Is it fair to say that since I only make 40k a year, by right I should only get a limit high enough that a low income would support? Am I just pretty much set to never be in that high limit credit card club no matter how high my scores are? Just curious.

Re: High scores plus low income equals stagnant?

Anonymous — Tue, 16 Jun 2015 01:25:32 GMT

If you're a high score borrower who always pays back his obligations why would you need a limit that exceeds your needs? Limits need to be high enough so that your normal pattern of spending results in low utiliization. Maybe high enough to cover some large purchases and occasional revolving. Utilization at 3% with 20k total limit or 200k total limit is the same.

Re: High scores plus low income equals stagnant?

Bman70 — Tue, 16 Jun 2015 02:00:59 GMT

Since we don't know - what kind of limit do you consider high? What are yours now and what would you like. I don't see why you shouldn't get $5k - $15k credit lines easily. I personally wouldn't use a higher line than that.

Re: High scores plus low income equals stagnant?

Anonymous — Tue, 16 Jun 2015 02:08:00 GMT

@Anonymous wrote:
If you're a high score borrower who always pays back his obligations why would you need a limit that exceeds your needs? Limits need to be high enough so that your normal pattern of spending results in low utiliization. Maybe high enough to cover some large purchases and occasional revolving. Utilization at 3% with 20k total limit or 200k total limit is the same.

That is the best explanation I have seen of how much credit a person should have. Thank you! I will definitely use that!

Re: High scores plus low income equals stagnant?

Gunnar419 — Tue, 16 Jun 2015 02:08:49 GMT

@mzgg09 wrote:
I was just wondering and thinking about something when it comes to major credit card limits. You work hard to get high scores so that you can get good credit. And in turn you hope that this good credit earns you some high limit cards. But what do you do when you have the score to get high limit cards but not the income to support? Is it fair to say that since I only make 40k a year, by right I should only get a limit high enough that a low income would support? Am I just pretty much set to never be in that high limit credit card club no matter how high my scores are? Just curious.

I make considerably less than $40k and have scores in the 800s. I have six ccs. Two have CLs over $15k and two have CLs over $10k. That might not be what you call high, but it's not what I'd call stagnation, either.

In the two or so years since I joined MyFico, I've gone from somewhere around $11k total CLs to over $60k total CLs. That's not stagnation, either.

Re: High scores plus low income equals stagnant?

mzgg09 — Tue, 16 Jun 2015 02:43:38 GMT

The highest limit card I have is 5k. I've had one 2k and one 3k approval. I'm thankful for the approvals as oppose to denials. I would consider high limits as 10k and above. I haven't applied for many cards since going above 700 with scores. Right now I'm ok with the credit I have. But would love the big ticket cards when I do apply for something again.

Re: High scores plus low income equals stagnant?

Anonymous — Tue, 16 Jun 2015 02:50:08 GMT

@Anonymous wrote:
@Anonymous wrote:
If you're a high score borrower who always pays back his obligations why would you need a limit that exceeds your needs? Limits need to be high enough so that your normal pattern of spending results in low utiliization. Maybe high enough to cover some large purchases and occasional revolving. Utilization at 3% with 20k total limit or 200k total limit is the same.
That is the best explanation I have seen of how much credit a person should have. Thank you! I will definitely use that!

It is & so true!

Re: High scores plus low income equals stagnant?

Anonymous — Tue, 16 Jun 2015 02:55:51 GMT

My daugher makes 25k a yr and has a 15k limit on her BofA card. She uses it all the time for smaller purchases and on occasion, buys furniture and pays it off in a month or two. Always plans for everything. I think it depends on what you plan on doing. I like using my cc's instead of debit. And also like knowing I can buy something and not go over that 30% mark. Well, actually, more like 10-12%. Can't go any higher, will freak outl

Re: High scores plus low income equals stagnant?

Bman70 — Tue, 16 Jun 2015 03:02:09 GMT

@mzgg09 wrote:
The highest limit card I have is 5k. I've had one 2k and one 3k approval. I'm thankful for the approvals as oppose to denials. I would consider high limits as 10k and above. I haven't applied for many cards since going above 700 with scores. Right now I'm ok with the credit I have. But would love the big ticket cards when I do apply for something again.

Yeah sounds like you could get some CLIs on those cards.. Try soft pulls if possible. The 2-3k approvals aren't limited by income, since I've received a $10k approval when I was reporting under $40k income. It must be some other factor - age of history, age of accounts, etc.

Re: High scores plus low income equals stagnant?

Man-Of-Steel — Tue, 16 Jun 2015 09:34:32 GMT

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
If you're a high score borrower who always pays back his obligations why would you need a limit that exceeds your needs? Limits need to be high enough so that your normal pattern of spending results in low utiliization. Maybe high enough to cover some large purchases and occasional revolving. Utilization at 3% with 20k total limit or 200k total limit is the same.
That is the best explanation I have seen of how much credit a person should have. Thank you! I will definitely use that!
It is & so true!

I also like the response from jtfan80 above. Great advice.

Re: High scores plus low income equals stagnant?

Anonymous — Tue, 16 Jun 2015 09:53:06 GMT

@Gunnar419 wrote:
@mzgg09 wrote:
I was just wondering and thinking about something when it comes to major credit card limits. You work hard to get high scores so that you can get good credit. And in turn you hope that this good credit earns you some high limit cards. But what do you do when you have the score to get high limit cards but not the income to support? Is it fair to say that since I only make 40k a year, by right I should only get a limit high enough that a low income would support? Am I just pretty much set to never be in that high limit credit card club no matter how high my scores are? Just curious.
I make considerably less than $40k and have scores in the 800s. I have six ccs. Two have CLs over $15k and two have CLs over $10k. That might not be what you call high, but it's not what I'd call stagnation, either.

In the two or so years since I joined MyFico, I've gone from somewhere around $11k total CLs to over $60k total CLs. That's not stagnation, either.

I'm in a similar situation as Gunnar419 in the sense that when I started here in 2012 my total credit limit was $2,475 spread across three cards. Without a major income jump since then, I have gotten myself to to what you see now in my signature. In the future I hope to be somewhere around where Gunnar419 is, with something like 15k on each card. That's my goal.

Re: High scores plus low income equals stagnant?

Gunnar419 — Tue, 16 Jun 2015 13:06:46 GMT

Nicely done, relentless602. You're well on your way with that healthy portfolio of cards.

Of course there are limits to what cccs are going to offer to someone with a modest income, but I've found that those limits are surprisingly high for people who have good scores + long and perfect history. Having a well established record of paying back your debts is worth more than having a high income but unknown or shaky reliability.

Re: High scores plus low income equals stagnant?

takeshi74 — Tue, 16 Jun 2015 13:14:31 GMT

@mzgg09 wrote:
Is it fair to say that since I only make 40k a year, by right I should only get a limit high enough that a low income would support? Am I just pretty much set to never be in that high limit credit card club no matter how high my scores are? Just curious.

As other have asked what's "high"? Always clarify such subjective words.

@mzgg09 wrote:
But what do you do when you have the score to get high limit cards but not the income to support?

You work with what you have. However, it seems you're making some assumptions. Difficult to say for certain given the vague nature of your OP. What do you think your income restricts you to? Gunnar419 has provided one example of what's possible with income lower than yours but it depends a lot on credit profile and not just income. I think back when I was in that income bracket I managed maybe $17K in total limits but I didn't know anything about credit. My payment history was clean but utilization was certainly high.

Re: High scores plus low income equals stagnant?

Anonymous — Tue, 16 Jun 2015 16:20:25 GMT

@Gunnar419 wrote:
@mzgg09 wrote:
I was just wondering and thinking about something when it comes to major credit card limits. You work hard to get high scores so that you can get good credit. And in turn you hope that this good credit earns you some high limit cards. But what do you do when you have the score to get high limit cards but not the income to support? Is it fair to say that since I only make 40k a year, by right I should only get a limit high enough that a low income would support? Am I just pretty much set to never be in that high limit credit card club no matter how high my scores are? Just curious.
I make considerably less than $40k and have scores in the 800s. I have six ccs. Two have CLs over $15k and two have CLs over $10k. That might not be what you call high, but it's not what I'd call stagnation, either.

In the two or so years since I joined MyFico, I've gone from somewhere around $11k total CLs to over $60k total CLs. That's not stagnation, either.

JESUS!!!! (gets down on knees to praise) what cards do you have

Re: High scores plus low income equals stagnant?

happypill — Tue, 16 Jun 2015 23:17:49 GMT

There's always a lot of talk about credit scores (this is myFICO of course) and that's definitely the first step in the credit approval process, but ultimately, the question is how much can a borrwer pay back? Income is obviously a factor, but some people are able to pay back a lot more because of reimbursements from employers or business expenses, etc.

Also, the lenders have to be thinking about their liability vs. their opportunity to make money. If someone is charging $500 a month, there's only so much a bank can make from those charges. Giving them a huge limit would be a risk with little reward potential. Someone who charges $10k a month would have a lot higher reward potential, so it would be worth the risk (considering other factors of course) to offer them a higher limit.

Re: High scores plus low income equals stagnant?

kdm31091 — Tue, 16 Jun 2015 23:28:02 GMT

You won't necessarily be "stagnant". You can get CLIs and growth without large income. Using the cards responsibly over time will go a long way with most lenders (some like Chase just aren't big on CLIs). Discover and Capital One come to mind as typically giving CLIs to those who show a good history (although nothing is of course guaranteed).

Now there will be an upper limit on what you can achieve with your income; lenders aren't likely to give you limits 2-3x your income because there's no basis for being able to pay it back if you maxed it out. That said, some people do have limits well above their incomes. If you are disciplined enough, it's fine, but it can be a disaster if you overspend and can't pay it back because your income doesn't match up with the limits.

Re: High scores plus low income equals stagnant?

Imperfectfuture — Tue, 16 Jun 2015 23:49:06 GMT

@Gunnar419 wrote:
@mzgg09 wrote:
I was just wondering and thinking about something when it comes to major credit card limits. You work hard to get high scores so that you can get good credit. And in turn you hope that this good credit earns you some high limit cards. But what do you do when you have the score to get high limit cards but not the income to support? Is it fair to say that since I only make 40k a year, by right I should only get a limit high enough that a low income would support? Am I just pretty much set to never be in that high limit credit card club no matter how high my scores are? Just curious.
I make considerably less than $40k and have scores in the 800s. I have six ccs. Two have CLs over $15k and two have CLs over $10k. That might not be what you call high, but it's not what I'd call stagnation, either.

In the two or so years since I joined MyFico, I've gone from somewhere around $11k total CLs to over $60k total CLs. That's not stagnation, either.

Same for moi. Though I am not in the 800's, my limits tend to be higher. (I am NOT comfortable with Barclays 10k, I like 5k, but 3k is good too). I only asked for 1500 increase on BCE. I could of had that at 10k also. What the CCC's see is usage. This is what they like. Then, they tend to match other limits, as much as income allows. I am in the upper 20's, though projected would be lower to mid 30's. I am retired with investment and business income.

Re: High scores plus low income equals stagnant?

Anonymous — Wed, 17 Jun 2015 00:09:40 GMT

for my cc the limits combines is way passed what i make a year.

Re: High scores plus low income equals stagnant?

Gunnar419 — Wed, 17 Jun 2015 00:30:29 GMT

@Anonymous wrote:
@Gunnar419 wrote:
@mzgg09 wrote:
I was just wondering and thinking about something when it comes to major credit card limits. You work hard to get high scores so that you can get good credit. And in turn you hope that this good credit earns you some high limit cards. But what do you do when you have the score to get high limit cards but not the income to support? Is it fair to say that since I only make 40k a year, by right I should only get a limit high enough that a low income would support? Am I just pretty much set to never be in that high limit credit card club no matter how high my scores are? Just curious.
I make considerably less than $40k and have scores in the 800s. I have six ccs. Two have CLs over $15k and two have CLs over $10k. That might not be what you call high, but it's not what I'd call stagnation, either.

In the two or so years since I joined MyFico, I've gone from somewhere around $11k total CLs to over $60k total CLs. That's not stagnation, either.
JESUS!!!! (gets down on knees to praise) what cards do you have

If you'll get up off your knees and dust yourself off, I'll tell you.

Discover It: $15,700

Cap1 Quicksilver: $15,000

Barclays Sallie Mae MC: $12,000

Amex Costco TE: $11,200

The other two are Chase Freedom and Amex ED, both between $5-10k.

I have to admit, it sometimes amazes me, too, given my paltry income.

I owe it all to MyFico and to having had credit longer than some MyFicoans have been alive.

Re: High scores plus low income equals stagnant?

dmFICO8 — Wed, 17 Jun 2015 01:45:11 GMT

40k income does limit the start limit of new cards, though if 10k SL/CL is what you looking for you will still get it after some history and high score, 15k SL is very top call, and 20k is pretty much near impossible, what you can do is to bump the SL to over 10k with soft CLI or HP if you want, or apply for new card from same issuer then combine limit if the issuer allows that. However, your total credit limit is still very high.

I use 45k income on app, have over 10 years history, I usually apped when score at between 785-800, have 20 cards, total credit limit is 170k, have experience with Amex, Discover, Capital One, Chase, Citi, Synchrony(Walmart Master), TD bank, BBVA, Bank of America/FIA Card Services and Barclays, highest SL I got is 12k from Barclays (instant approval, too), have never gotten 15k SL, I do have over 20k total CL from some issuers, 30k from Amex (reached internal limit), but I don't combine cards/limit since all the cards I got will be kept and serve their purpose/benefit to me, did move a bit CL around from same issuer to fit me more. Currently half of my cards are at or slightly over 10k from soft CLI, quarter of my cards at 7k-9k, and other quarter at very low 1k-5k. I have no experience with CU that are generous to CL or have tried Capital One Venture card. In the end, you will get 10K SL approval once you have good history, but probably not 15K, and with a bit "work around" whether CLI or combine limits you will get cards to 15k to 25k if that's your purpose.