topic Re: Help me understand the buzz behind CLI's in Credit Cards

Help me understand the buzz behind CLI's

Anonymous — Wed, 30 Sep 2015 17:55:16 GMT

It seems as if many people are obsessed with growing their credit limits and this is something I don't quite understand. I'll preface by saying I have solid credit scores and most of my limits are fairly high (avg. around 5,000 with a few over 10,000). I see people asking all the time about getting CLI's, dropping cards because of lack of CLI's, cards not showing them any "love" etc. And I just don't get it? Once you have a decent limit why the obsession over it continuing to grow? I'm not being snarky, just trying to understand. Short of massive purchase shouldn't our CLI's (assuming they aren't insanely low) be pretty irrelevant? I pay off my cards multilple times a month and savvy credit users should be paying in full at the minimum as often as possible each statement cut (minus BT 0% stuff but let's leave that out for now).

Is it people not wanting to pay multiple times in a month? (Don't see why this is a big deal). Is it just wanting to say you can put 25,000 on a card? Especially for those with multiple cards (vast majority of us) it isn't as if you're not going to have enough credit to make certain purchases.

It just seems as if something many people are really obsessed over and I don't get it.

Re: Help me understand the buzz behind CLI's

Anonymous — Wed, 30 Sep 2015 17:58:07 GMT

I like getting a pat on the head from credit card companies.

Re: Help me understand the buzz behind CLI's

mitchblue — Wed, 30 Sep 2015 18:03:41 GMT

If you have a 50k card maybe a CLI doesn't matter. But for the lower limit cards, 5k or under they help .. For example, being able to spend more and stay with the 10% or lower utilization is big.

And having a 1k card and wanting to make a $1200 purchase isn't possible..

Re: Help me understand the buzz behind CLI's

Anonymous — Wed, 30 Sep 2015 18:05:35 GMT

While I think they are really overstressed here, having to pay multiple times a month is a good reason for getting a CLI! Financially (and not scorewise) the best strategy is to pay just once, on the due date. Anything else is wasting a key feature of the credit card, the interest free float. And then, having a balance that is only a fairly small part of the CL is OK for scoring too.

Re: Help me understand the buzz behind CLI's

Jansroom726 — Wed, 30 Sep 2015 18:06:14 GMT

While I'm done seeking new credit (108K credit on 45k income), I obtained it for these reasons:

- Having accounts with various lenders (Not putting all my eggs in 1 basket)

- So that I can charge without really having to worry about my monthly utilization rate

- In the event of a huge emergency, in theory I would have the ability for large purchases. (Still making sure to grow an actual savings account)

- To show creditors I'm capable of managing a large credit limit

- While I have requested my fair share of CLI's, most of them were actually automatic, or given high SL at the time of account opening.

I'm to the point where I'm afraid my lenders may reduce my lines or otherwise take AA - but I am prepared to fight my case with the reasons listed above.

Just my point of view.

Re: Help me understand the buzz behind CLI's

Anonymous — Wed, 30 Sep 2015 18:08:17 GMT

geoforce the need for people getting CLIs is WAY overrated. if you report no balances or between that 1-9% then it's really just not needed in many cases. if you need to pay more than once a month due to limit restrictions then it's understandable but if you use it all month and don't even use half of it then you should be fine. period.

Re: Help me understand the buzz behind CLI's

mitchblue — Wed, 30 Sep 2015 18:13:16 GMT

Honestly, paying twice a month when you have only one-two cards might seem fine. I don't want to pay twice a month on 10 cards. Others who have 30-40-50 or more cards, would be a major hassle I suspect.. I just like to set it on autopay and forget about it.

Re: Help me understand the buzz behind CLI's

Anonymous — Wed, 30 Sep 2015 18:18:38 GMT

@Anonymous wrote:
While I think they are really overstressed here, having to pay multiple times a month is a good reason for getting a CLI! Financially (and not scorewise) the best strategy is to pay just once, on the due date. Anything else is wasting a key feature of the credit card, the interest free float. And then, having a balance that is only a fairly small part of the CL is OK for scoring too.

I pay multiple times a month because I want to, not necessarily because I must. Why is it financially the best strategy to pay once? If you charge 500 essentially no difference between paying 500 on the due date or paying 250 before it or vice versea.

Re: Help me understand the buzz behind CLI's

Anonymous — Wed, 30 Sep 2015 18:19:01 GMT

not many people spend more than twice a month on 10 cards and max them out those 2 or more times. your example is rather unrealistic

Re: Help me understand the buzz behind CLI's

Anonymous — Wed, 30 Sep 2015 18:21:02 GMT

@mitchblue wrote:
If you have a 50k card maybe a CLI doesn't matter. But for the lower limit cards, 5k or under they help .. For example, being able to spend more and stay with the 10% or lower utilization is big.

And having a 1k card and wanting to make a $1200 purchase isn't possible..

Yes I can completely see them for low limits, but the vast majority of our consumer spend is going to be purchases that are under 5,000 a month easily. And even if you spend 5,000 the opportunity to pay that in full and charge another 5,000 exists.

I'm not against CLI's I just think it seems as if a lot of people take them very seriously or become upset when they hit the "luv" button and don't get a big jump. I admit I'm fortuante to have CLI's that easily cover all my spend but the obsession seems to be quite high around these parts.

Re: Help me understand the buzz behind CLI's

mitchblue — Wed, 30 Sep 2015 18:22:20 GMT

@Anonymous wrote:
not many people spend more than twice a month on 10 cards and max them out those 2 or more times. your example is rather unrealistic

They don't need to spend twice. And if you can't see the benefit of CLI on low limit cards, maybe this thread is unrealistic.

Re: Help me understand the buzz behind CLI's

LadyJEsq — Wed, 30 Sep 2015 18:24:23 GMT

@Anonymous wrote:
It seems as if many people are obsessed with growing their credit limits and this is something I don't quite understand. I'll preface by saying I have solid credit scores and most of my limits are fairly high (avg. around 5,000 with a few over 10,000). I see people asking all the time about getting CLI's, dropping cards because of lack of CLI's, cards not showing them any "love" etc. And I just don't get it? Once you have a decent limit why the obsession over it continuing to grow? I'm not being snarky, just trying to understand. Short of massive purchase shouldn't our CLI's (assuming they aren't insanely low) be pretty irrelevant? I pay off my cards multilple times a month and savvy credit users should be paying in full at the minimum as often as possible each statement cut (minus BT 0% stuff but let's leave that out for now).

Is it people not wanting to pay multiple times in a month? (Don't see why this is a big deal). Is it just wanting to say you can put 25,000 on a card? Especially for those with multiple cards (vast majority of us) it isn't as if you're not going to have enough credit to make certain purchases.

It just seems as if something many people are really obsessed over and I don't get it.

I'll never get how people don't get that with 7 billion people on the planet, we're not all going to have similiar issues. Just because you don't see why paying multiple times on a CC(s) is a big deal, that means no one else should?

I'll echo the poster above that with a higher TCL, maintaining a >10% Util is much easier. Especially for those of us who use CC exclusively for the rewards.

Re: Help me understand the buzz behind CLI's

mitchblue — Wed, 30 Sep 2015 18:25:10 GMT

@Anonymous wrote:
@mitchblue wrote:
If you have a 50k card maybe a CLI doesn't matter. But for the lower limit cards, 5k or under they help .. For example, being able to spend more and stay with the 10% or lower utilization is big.

And having a 1k card and wanting to make a $1200 purchase isn't possible..
Yes I can completely see them for low limits, but the vast majority of our consumer spend is going to be purchases that are under 5,000 a month easily. And even if you spend 5,000 the opportunity to pay that in full and charge another 5,000 exists.

I'm not against CLI's I just think it seems as if a lot of people take them very seriously or become upset when they hit the "luv" button and don't get a big jump. I admit I'm fortuante to have CLI's that easily cover all my spend but the obsession seems to be quite high around these parts.

Example, I needed to make a big purchase. My highest limit at the time was 9.4k, wasn't enough. So even If I was willing to pay 5 times a month I didn't have a credit card that could hold such a limit.. Or a 3k purchase, and the best card to use only had a 2.5k limit.

Re: Help me understand the buzz behind CLI's

Anonymous — Wed, 30 Sep 2015 18:25:51 GMT

@mitchblue wrote:
@Anonymous wrote:
not many people spend more than twice a month on 10 cards and max them out those 2 or more times. your example is rather unrealistic
They don't need to spend twice. And if you can't see the benefit of CLI on low limit cards, maybe this thread is unrealistic.

CLI on low limit cards is something I laid out in the original post. That makes complete sense. What makes less sense to me is the people with decently high limits talking about closing cards because the issuer hasn't increased their CLI in the past 90 days or something. Which is why I was trying to understand why so many people seem so interested in them.

Re: Help me understand the buzz behind CLI's

kdm31091 — Wed, 30 Sep 2015 18:27:45 GMT

I like CLIs but the obsession is puzzling. Once a card gets to a limit that is sufficient for your normal spend without having to make many payments or suffer from high utilization I see no point in obsessing over it.

Plus shooting for too many CLIs can hurt you down the road with overall limits vs income.

Re: Help me understand the buzz behind CLI's

Anonymous — Wed, 30 Sep 2015 18:28:28 GMT

@LadyJEsq wrote:
@Anonymous wrote:
It seems as if many people are obsessed with growing their credit limits and this is something I don't quite understand. I'll preface by saying I have solid credit scores and most of my limits are fairly high (avg. around 5,000 with a few over 10,000). I see people asking all the time about getting CLI's, dropping cards because of lack of CLI's, cards not showing them any "love" etc. And I just don't get it? Once you have a decent limit why the obsession over it continuing to grow? I'm not being snarky, just trying to understand. Short of massive purchase shouldn't our CLI's (assuming they aren't insanely low) be pretty irrelevant? I pay off my cards multilple times a month and savvy credit users should be paying in full at the minimum as often as possible each statement cut (minus BT 0% stuff but let's leave that out for now).

Is it people not wanting to pay multiple times in a month? (Don't see why this is a big deal). Is it just wanting to say you can put 25,000 on a card? Especially for those with multiple cards (vast majority of us) it isn't as if you're not going to have enough credit to make certain purchases.

It just seems as if something many people are really obsessed over and I don't get it.
I'll never get how people don't get that with 7 billion people on the planet, we're not all going to have similiar issues. Just because you don't see why paying multiple times on a CC(s) is a big deal, that means no one else should?

I'll echo the poster above that with a higher TCL, maintaining a >10% Util is much easier. Especially for those of us who use CC exclusively for the rewards.

Thread was for discussion not to attempt to act like everyone has the same situation.

Re: Help me understand the buzz behind CLI's

mitchblue — Wed, 30 Sep 2015 18:30:31 GMT

@kdm31091 wrote:
I like CLIs but the obsession is puzzling. Once a card gets to a limit that is sufficient for your normal spend without having to make many payments or suffer from high utilization I see no point in obsessing over it.

Plus shooting for too many CLIs can hurt you down the road with overall limits vs income.

That would go into the category of some make 20k a year while others earn 2 million a year. We're all different. And as someone alluded to earlier, many CLI are auto.

Re: Help me understand the buzz behind CLI's

Anonymous — Wed, 30 Sep 2015 18:30:59 GMT

@kdm31091 wrote:
I like CLIs but the obsession is puzzling. Once a card gets to a limit that is sufficient for your normal spend without having to make many payments or suffer from high utilization I see no point in obsessing over it.

Plus shooting for too many CLIs can hurt you down the road with overall limits vs income.

This is where I lie and hence the thread attempting to understand some of the thought processes other than the obvious ones like 500 dollar limit isn't enough. I also don't understand the CLI hostage mentality of if company X doesn't increase my limit soon I'm closing the account. I could see it if it was a low limit card you've had for a while but don't get the people who haven't had cards that long expecting companies to drastically increase them.

Re: Help me understand the buzz behind CLI's

mitchblue — Wed, 30 Sep 2015 18:37:14 GMT

......

Re: Help me understand the buzz behind CLI's

Anonymous — Wed, 30 Sep 2015 18:39:04 GMT

@Anonymous wrote:
@Anonymous wrote:
While I think they are really overstressed here, having to pay multiple times a month is a good reason for getting a CLI! Financially (and not scorewise) the best strategy is to pay just once, on the due date. Anything else is wasting a key feature of the credit card, the interest free float. And then, having a balance that is only a fairly small part of the CL is OK for scoring too.
I pay multiple times a month because I want to, not necessarily because I must. Why is it financially the best strategy to pay once? If you charge 500 essentially no difference between paying 500 on the due date or paying 250 before it or vice versea.

Pretty elementary! It's not directly the number of payments, more when you pay. Any amount I pay before the due date is money I no longer have, and so cannot earn interest on. Strictly speaking, I could pay twice on the due date if I chose, but making payments before is not optimal from an interest earning point of view.