topic Re: Higher Limits Beget Higher SL's question... in Credit Cards

Higher Limits Beget Higher SL's question...

grillandwinemaster — Mon, 29 Aug 2016 16:55:15 GMT

Ok, so here's A rhetorical question...

I have two of my 5 credit cards below that are literally stuck and frozen in time at $500 and at $600. The rest of my portfolio is in the $5k and $6k range, which is fine with me. I don't need larger limits, but I would like to have a $4k+ Visa card.

Here's my question, if I close my two small limits, would chances of being approved for a $4k+ sl be greater, since I would ONLY have 5k cards in my portfolio??

All things being equal, of course. I realize That each credit profile is unique and different etc etc...

Thanks for your input.

Re: Higher Limits Beget Higher SL's question...

Anonymous — Mon, 29 Aug 2016 17:14:22 GMT

As with all of these types of questions, "it depends on the individual creditor and what type of risk they're willing to accept"

That said... I have had a $4.4K limit card on my profile and it's never held me back from qualifying for cards at many multiples of that limit. I think it might be different if someone had, say, a bunch of $500-600 cards and one $2000 card. In your case you have an established history of $5-6K cards and obviously must have the credit profile to support it. Any lender willing to give you a $5K card won't be held back by your two smaller cards.

I don't think your small cards are holding you back but do consider if they're worth keeping. If you don't use them often and if neither is your oldest tradeline, and there aren't any real tangible benefits to using them, maybe get rid of them.

Re: Higher Limits Beget Higher SL's question...

Anonymous — Mon, 29 Aug 2016 20:57:05 GMT

If your credit profile & income supports a $4k starting limit on a Visa, then there shouldn't be a problem. Opinions vary on larger limits begetting larger limits. My credit limits range between $1K - $30K. It's awesome having a card with a $30K limit, but my $1K limit is great too because it gets a lot of use. I would focus your attention on the usefulness/benefits of a card versus it's limit. Good luck to you!

Re: Higher Limits Beget Higher SL's question...

Anonymous — Mon, 29 Aug 2016 23:45:17 GMT

I don't really have a firm opinion on the high limits beget high limits adage, but perhaps it feels that way because so many of us are rebuilding. Sync was the first lender to give me 5K and my SLs since have all been in the 4-6K range since. It might appear like the higher limits made other lenders give me better limits, but my profile had also improved and aged a bit. I've still got a tiny Citi DC and Victoria's Secret card, but I don't think it has hindered my new SLs. I think my limits are just appropriate for my current profile.

You are so close to the 700s, it would seem that things might start moving along sooner than later!

Re: Higher Limits Beget Higher SL's question...

sillykitty1 — Tue, 30 Aug 2016 01:03:19 GMT

I have limits between $1K to $32K. I have actively reconned SL's, and asked to match highest limits. It has worked, or at least gotten the SL's raised, each time. Never has an underwriter said, oh, but about that $1K ....

Re: Higher Limits Beget Higher SL's question...

Anonymous — Tue, 30 Aug 2016 01:50:33 GMT

I don't think the low limit cards would have any impact. The only negative thing that could happen with low limit cards is if a moderate balance is reported you're probably at 50% utilization or more which could hold back a nice CLI on another card since it's not a good "look" but that's about it.

Re: Higher Limits Beget Higher SL's question...

wasCB14 — Tue, 30 Aug 2016 01:52:40 GMT

I'd focus more on getting your scores up than your average CL. A 648 EX will probably hurt more than the presence of two low-CL (but healthy) accounts.

Re: Higher Limits Beget Higher SL's question...

UncleB — Tue, 30 Aug 2016 01:57:44 GMT

@Anonymous wrote:
I don't think the low limit cards would have any impact. The only negative thing that could happen with low limit cards is if a moderate balance is reported you're probably at 50% utilization or more which could hold back a nice CLI on another card since it's not a good "look" but that's about it.

FWIW, my BCP has a CL of $1k and it regularly reports with 50%+ utilization, so far it's never caused a problem with any of my other cards getting CLIs

Occasionally I'll PIF before the statement generates, but honestly I can't tell a difference score-wise (my overall utilization is under 10%). I now just let it report the actual balance without regard to score.

Re: Higher Limits Beget Higher SL's question...

grillandwinemaster — Tue, 30 Aug 2016 06:28:21 GMT

@wasCB14 wrote:
I'd focus more on getting your scores up than your average CL. A 648 EX will probably hurt more than the presence of two low-CL (but healthy) accounts.

Experian doesn't Like me. Which sucks because here in SoCal, everyone is experian trigger happy!

But my scores have actually increased, I need to update my signature.

Re: Higher Limits Beget Higher SL's question...

Anonymous — Tue, 30 Aug 2016 06:45:48 GMT

I think it depends on the creditor, too. Some cards get higher limits than others. Citi Double Cash tends to give lower starting limits than say, Capital One Quicksilver. Credit unions can also give higher limits if your credit score warrants it. That being said, so much just depends on the individual situation. As others have said, it is always good to improve your credit score before going too far. You will get higher limits and lower interest rates the higher your score.

Re: Higher Limits Beget Higher SL's question...

grillandwinemaster — Tue, 30 Aug 2016 06:52:07 GMT

@Anonymous wrote:
I think it depends on the creditor, too. Some cards get higher limits than others. Citi Double Cash tends to give lower starting limits than say, Capital One Quicksilver. Credit unions can also give higher limits if your credit score warrants it. That being said, so much just depends on the individual situation. As others have said, it is always good to improve your credit score before going too far. You will get higher limits and lower interest rates the higher your score.

Good point! Patience is a virtue!

Re: Higher Limits Beget Higher SL's question...

driftless — Tue, 30 Aug 2016 10:28:39 GMT

@Anonymous wrote:
I think it depends on the creditor, too. Some cards get higher limits than others. Citi Double Cash tends to give lower starting limits than say, Capital One Quicksilver. Credit unions can also give higher limits if your credit score warrants it. That being said, so much just depends on the individual situation. As others have said, it is always good to improve your credit score before going too far. You will get higher limits and lower interest rates the higher your score.

Adding to Musiclover said, it appears that some banks do not want to be a starter/rebuilder bank and want you to have a decent/high CL with another bank first, Chase comes to mind here. While this is a chicken and egg question, I do think that closing small cards never hurts you.

Re: Higher Limits Beget Higher SL's question...

sillykitty1 — Tue, 30 Aug 2016 13:09:33 GMT

@driftless wrote:
I do think that closing small cards never hurts you.

Unless those low limit cards provide benefits that your higher limit cards do not. No point in closing cards ONLY because of a low limit.

For example, my low limit cards-

BOA BBR $1K - $25 per quater for charging Netflix

Ritz - $1K - Ritz benefits w no AF

JCB $4K - 3% CB

Re: Higher Limits Beget Higher SL's question...

takeshi74 — Tue, 30 Aug 2016 13:25:19 GMT

@grillandwinemaster wrote:
Higher Limits Beget Higher SL's question...

Do not rely on such memes and oversimplifations.

Limits factor into revolving utilization. Revolving utilization falls under Amounts Owed. Amounts Owed is just one of many factors for FICO scoring.

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

A FICO score is just one consideration for a creditor that uses a FICO score. A creditor will determine the limits, APR, CLI, offers, etc that you qualify for based on your entire credit profile at time of consideration.

It's not just about limits. Creditors do not simply match limits. You cannot assume simple and direct causal relationships like that. A card with a low limit isn't preventing you from getting higher limits. Your entire credit profile determines such things -- not just a single attribute on a singe tradeline.

@grillandwinemaster wrote:
Ok, so here's A rhetorical question...

That wasn't a rhetorical question. That was just a question.

@grillandwinemaster wrote:
All things being equal, of course. I realize That each credit profile is unique and different etc etc...

It's not just that "each credit profile is unique" and that there's no way to analyze these things. There are certainly credit profiles that are similar enough to see the same sort of response from a given creditor.

Your credit profile determines what you qualify for. If you're not getting the limits you want then you need to identify and address the items in your profile that are preventing you from getting them. That said, there are some products that just don't tend to grow and it's up to you to determine if you're going to worry over them and try to get high limits, just close them out or whatever you want to do with them.

@grillandwinemaster wrote:
I have two of my 5 credit cards below that are literally stuck and frozen in time at $500 and at $600. The rest of my portfolio is in the $5k and $6k range

You can't just expect that your limits should be the same or similar to each other. Even with cards well into the 5 digits I've had cards with much lower limits amd some cards that didn't grow like others. Creditors and products are not necessarily going to extend the same amount to a given credit profile. Additionally, your credit profile isn't static. You can't just expect limits to constantly increase. You may get higher limits in future. You might get lower limits in future. It all depends on your credit profile at time of consideration and the underwriting criteria for the product you're applying for or looking to get a CLI from.

@grillandwinemaster wrote:
Current Scores 3/2016 Equifax 676 Transunion 697 Experian 648

Your scores reflect that there are concerns with your credit. If you want a $4K+ card then you need to work on those however the problem is not your low limit cards. If you're willing to share enough about your credit profile we can certainly provide feedback if you're having difficulty identifying them on your own.

Re: Higher Limits Beget Higher SL's question...

Anonymous — Tue, 30 Aug 2016 14:12:30 GMT

@takeshi74 wrote:

Do not rely on such memes and oversimplifations.

The OP had a question and he asked it. That's what this forum is for. Just about everything with respect to credit is going to be an "oversimplification" as all profiles are like fingerprints and no two are identical. People ask questions knowing that those that have been in similar positions and had similar experience will chime in and give a response and information that could be useful.

Re: Higher Limits Beget Higher SL's question...

Anonymous — Tue, 30 Aug 2016 14:34:50 GMT

Your score influences limits. SP increases with some lenders may be 50/50 relationship and score, but its a more fuzzy feeling to get a 4k+ out of the gate then a card I've had to do extensive rock climbing on.

Re: Higher Limits Beget Higher SL's question...

kdm31091 — Tue, 30 Aug 2016 14:40:12 GMT

I think like anything else you shouldn't rely too much on mantras like "higher limits beget higher limits". In my experience it really is about your profile at the time of the application. If your profile and income support a higher limit you'll be approved for it regardless of your other limits. If not you will get a lower limit.

On a manual review/recon, an analyst may see other high limits and demonstrated responsible use, and possibly give you a higher limit, but it's unclear whether the auto approval system really factors it in, and most approvals are not manually reviewed so I'm not sure how often it matters too much.

Re: Higher Limits Beget Higher SL's question...

Anonymous — Tue, 30 Aug 2016 15:04:26 GMT

While profile strength, score, income support etc. are all important factors and usually are indicative of what can be expected from a creditor (SL, CLI, etc) this isn't always the case.

For example, one can be approved for 3 cards at the same time with limits of $10k, $12.5k and $3k. All creditors were looking at the same exact profile information so you can't really make the argument for the $3k card that the profile/income/score or whatever didn't "support" a higher limit as it was given on the other 2 trade lines.

Another example is someone who has 3 cards all with similar low-mid limits and requests CLIs on all of them at the same time getting CLIs of $10k and $20k on two of the cards but only $500 on the 3rd. I don't buy the "profile doesn't support an increase" argument on the $500 CLI card since clearly the other 2 cards looking at the same profile had no problem giving monster increases.

My point is that outside of profile, different creditors react differently for different reasons... many that we'll never understand and shouldn't even try to understand. Getting back to the OPs original topic, the answer that makes the most sense is that results could very strongly based on creditor... outside of profile and other seemingly more important data.

Re: Higher Limits Beget Higher SL's question...

Chickenpotpie — Tue, 30 Aug 2016 17:57:53 GMT

It varies. I can only say for msyelf what I've noticed...may not be much to go on

I don't really think they cared that I had that 3200 limit cap one card that hand't moved limits in dog years. What seemed to be the defining moment was the fact that I had the income to handle my spends. My spends were not very small (they didn't care if I made one of several payments frankly), and, my scores also helped when they started to stay well above the 720 mark.

For me, Discover was the first. I like discover (just got a matching 400+ cash back so whats not to like?) And they seem to like me back. That may not be the case with all banks no matter how much money you throw at them.

CapOne didn't grow with me. I sometimes call them CrapOne but well...lol kinda in jest. They didn't work out for me as a bank I could do business with, but they sure did help me get on the ladder!

My personal ethos for any bank; If they work for you, if they give you CLI's consistently,you like the rate and the perks on the card you have then stick with them. Drop'em like its hot if they don't.

I'm an advocate of slow and steady. If the cards are over 15 months old, you have supporting income and you put lots through the cards (and you have supporting scores) then ask for an increase. If you can't get one then sure, you SHOULD move to a card that can offer you what you need. I see no issue with that.

Re: Higher Limits Beget Higher SL's question...

sillykitty1 — Tue, 30 Aug 2016 22:58:41 GMT

@kdm31091 wrote:
I think like anything else you shouldn't rely too much on mantras like "higher limits beget higher limits". In my experience it really is about your profile at the time of the application. If your profile and income support a higher limit you'll be approved for it regardless of your other limits. If not you will get a lower limit.

On a manual review/recon, an analyst may see other high limits and demonstrated responsible use, and possibly give you a higher limit, but it's unclear whether the auto approval system really factors it in, and most approvals are not manually reviewed so I'm not sure how often it matters too much.

I think this is the part that does matter. You can recon a SL or CLI request for most lenders. So to me, it doesn't matter what an auto approval is, I'm going to call in and ask to match my highest limit.