topic Re: How high a total credit limit (for low income) is too high? in Credit Cards

How high a total credit limit (for low income) is too high?

Anonymous — Thu, 16 Feb 2017 01:19:59 GMT

Hello,

I'm a student working part time with an income of 28k, and I recently applied for an AMEX BCE and got approved with a 10k SL. This is higher than I should ever need for a single card (for the moment at least). However, the common consensus with AMEX is to apply for a CLI after the 2 month mark, right? I wanted to ask if that would even be wise in my my case. Even if they upped the CL another 5k to 15k, that would get my total CL across all lenders to 20k. Would it hurt me in any future applications because the ratio of total credit to income is too high? On the other hand it might help to show that I have experience handling higher CLs once I graduate.

I plan to apply for a VISA or MC which suits my needs in around 5/6 months.

Re: How high a total credit limit (for low income) is too high?

Creditplz — Thu, 16 Feb 2017 01:25:54 GMT

you can have a 20k CL but I don't understand why you would ever need it making 28k/yr.. also a 10k CL is more then enough to demonstrate that you can handle large Credit Lines.. oh and it could hurt you when applying for future credit, unless you're inflating your income. I don't think many lenders would extend another 10-20k on the income (i could be wrong).

Re: How high a total credit limit (for low income) is too high?

Anonymous — Thu, 16 Feb 2017 01:56:04 GMT

I'm curious to hear the responses. My listed income is 25k and I'm a tad bit over 20k across all my cards. I'm not sure how it is a red flag unless your utlization is high.

I've have only read about a guy here who was declined by PenFed for having too much available credit, but he had around 1.4 million in available credit.

Re: How high a total credit limit (for low income) is too high?

Anonymous — Thu, 16 Feb 2017 02:01:47 GMT

@Anonymous wrote:
Hello,
I'm a student working part time with an income of 28k, and I recently applied for an AMEX BCE and got approved with a 10k SL. This is higher than I should ever need for a single card (for the moment at least). However, the common consensus with AMEX is to apply for a CLI after the 2 month mark, right? I wanted to ask if that would even be wise in my my case. Even if they upped the CL another 5k to 15k, that would get my total CL across all lenders to 20k. Would it hurt me in any future applications because the ratio of total credit to income is too high? On the other hand it might help to show that I have experience handling higher CLs once I graduate.
I plan to apply for a VISA or MC which suits my needs in around 5/6 months.

It's not so much about the total credit limit, but rather the total credit limit in relation to your income. It's not uncommon to see people with 2-3 times their annual income in credit. So someone similar to you with a 50-75k limit, or someone making 100k with 300k.

Someone more qualified can explain the methodology that lenders are using in regard to this. I would say I wouldn't worry too much until you've got over 1x your annual income. But if it were me I would want to spread it around to multiple cards. But then again, you may want to concentrate it all on one or two.

Re: How high a total credit limit (for low income) is too high?

Anonymous — Thu, 16 Feb 2017 02:38:18 GMT

There are plenty of people on this forum with 2-3X or even 4-5X their income in overall credit limits.

Basically anyone is fine to roll with credit limits at or a bit above their income. You won't run into any trouble at that level.

Re: How high a total credit limit (for low income) is too high?

Habibimo — Thu, 16 Feb 2017 05:24:02 GMT

My reported income is 48k. And total credit I have is about 110k.

Re: How high a total credit limit (for low income) is too high?

MrsCHX — Thu, 16 Feb 2017 15:05:38 GMT

For me, getting my limits up is less about income to credit ratio. I mean, there isn't any card I intend to fully use the limit on. So I just want to be sure that with any card I have, I can buy something I'd normally buy (or on bank cards, normal spend), and be under 30% and preferably under 10%. It isn't about carrying a balance, just not having to worry about multiple payments.

Right now my total credit lines are less than half my income. I'll be happy when I have at least one 5-figure bank, Target to $4k+ (currently at $2k), Amazon to $6k (currently at $5k), and Pier1 to something usable (currently $500).

Re: How high a total credit limit (for low income) is too high?

Samac — Thu, 16 Feb 2017 15:15:04 GMT

My total current limit across all cards is about 67,000.
My income is right at 30k. As long as you're not maxing out cards I don't think they care too much. I never have more than 10% reporting. The only thing it could hurt is future cards if it's too high might not give you a good limit. But I haven't gotten a card in a while and it's fun to watch the growth.