topic Re: value of having high credit limits and other reasons in Credit Cards

value of having high credit limits and other reasons

fritscher — Sun, 12 Mar 2017 01:21:24 GMT

i am relatively new here..I do see that many people like to keep increasing their credit limits on their cards..I am wanted to do that too but i know I would never use those high limits..Is the reason why to have low util for the most part or do many of you actually charge 15000 a month and pay off? also in order to get about 15000 do you have to have very high income.? just some thoughs..I have the urge to do cli on my current cards just to see if that will make my credit scores go up more etc

thank you for feedback

Re: value of having high credit limits and other reasons

SouthJamaica — Sun, 12 Mar 2017 01:29:52 GMT

@fritscher wrote:
Hi
i am relatively new here..I do see that many people like to keep increasing their credit limits on their cards..I am wanted to do that too but i know I would never use those high limits..Is the reason why to have low util for the most part or do many of you actually charge 15000 a month and pay off? also in order to get about 15000 do you have to have very high income.? just some thoughs..I have the urge to do cli on my current cards just to see if that will make my credit scores go up more etc
thank you for feedback

Yes, it makes it easier to keep your utilization percentage low.

Re: value of having high credit limits and other reasons

Anonymous — Mon, 13 Mar 2017 07:08:19 GMT

Generally speaking, if you have had great credit your whole life you should have high limit credit cards by the time you are middle aged.

Re: value of having high credit limits and other reasons

Anonymous — Sun, 12 Mar 2017 01:35:18 GMT

Spot on for me as well. Making up for lost time, never having learned those lessons earlier in life.

For me it's about keeping util low and scores high, and having an available reserve in case something goes wrong, unexpected repairs, etc.

Also, I follow auctions sometimes, and I've missed a few really lucrative deals because I couldn't swing $1500 or so on a temporary basis, when the deals would have netted me $3-4K on the turnaround. Now I don't miss those deals.

Re: value of having high credit limits and other reasons

mjb59463 — Sun, 12 Mar 2017 01:43:24 GMT

Between my cards, I have more credit than I would ever feel comfortable using even 20% of. On the chance I would need to carry a balance for a short while now, my higher limits would definitely help cushion the UTIL blow.

But in my case, higher limits have been a double-edged sword. In the past, I used credit irresponsbly simply because it was available to me, and landed myself in a world of hurt with CC debt. I've since learned from that mistake, and managed to get out without any late payments, AA from lenders or derogs. That was pure luck, and I never want to be back there again.

I've never requested a CLI, all of mine have been automatically done on the lenders side. That's the way I plan to let it proceed from here on out.

Re: value of having high credit limits and other reasons

Anonymous — Sun, 12 Mar 2017 02:24:11 GMT

To answer your question OP, do you have to have a high income to obtain high limit cards my answer would be NO.

There are plenty of forum members here that have single credit lines that are 50% of their income or even higher, as well as others that have combined total credit limits that are several times their reported income... say 2-3X. There are a few outliers with credit limits that total 4-5X their income.

Re: value of having high credit limits and other reasons

TheVig — Sun, 12 Mar 2017 02:42:27 GMT

Higher limits, beget higher limits.

Re: value of having high credit limits and other reasons

Chris679 — Sun, 12 Mar 2017 02:53:20 GMT

@fritscher wrote:
Hi
i am relatively new here..I do see that many people like to keep increasing their credit limits on their cards..I am wanted to do that too but i know I would never use those high limits..Is the reason why to have low util for the most part or do many of you actually charge 15000 a month and pay off? also in order to get about 15000 do you have to have very high income.? just some thoughs..I have the urge to do cli on my current cards just to see if that will make my credit scores go up more etc
thank you for feedback

Some reasons to have high credit limits (in no particular order):

Help pad utilization

Asking for CLI is fun and some do that rather than apply for new cards (scratch the itch so to speak)

Vanity

Actually need the higher limit to make larger purchases or to not have to make multiple payments per month

It is my opinion that higher limits can lead to higher SL for other new accounts

Larger purchase power or cash advance in case of emergency

Re: value of having high credit limits and other reasons

Anonymous — Sun, 12 Mar 2017 02:59:22 GMT

Income sometimes brings high credit limits also having other high limit cards. . My DW is listed as the owner of our business. The business does very well. One of our cards is the Biz Spark card (reports on her credit) with over a $10K limit. What we have found is several banks have tried to match her credit limits or better them. That being said new cards after our Spark always come in over $10K for her and she gets $5K credit increases like candy without asking. I am at the point of locking her purse inthe office safe. We really dont want any more CLI on her cards. I on the other hand am the "office person." All my limits are more normal. I fight tooth and nail for cli. DW % use because of the total limit remains very low typically 1- 2 %. This drives score even higher and gets her even bigger limits. For our zip code our income and net worth are both above average. We do PIF every month so unless I want a home makeover the cl don't help us.

Re: value of having high credit limits and other reasons

newhis — Sun, 12 Mar 2017 03:41:30 GMT

@fritscher wrote:
Hi
i am relatively new here..I do see that many people like to keep increasing their credit limits on their cards..I am wanted to do that too but i know I would never use those high limits..Is the reason why to have low util for the most part or do many of you actually charge 15000 a month and pay off? also in order to get about 15000 do you have to have very high income.? just some thoughs..I have the urge to do cli on my current cards just to see if that will make my credit scores go up more etc
thank you for feedback

Not at all. My Discover card is over 60% my reported income. I have 3 Chase cards that total 55% reported income.

I'll say it is not hard, but it takes time, to get a 15,000 card with 30,000 income. Easier and faster if your income is higher.

Higher limits will not increase your score unless they help your util. There are people with few cards and low limits with high score just by paying down the card and letting report a small balance.

Re: value of having high credit limits and other reasons

Anonymous — Sun, 12 Mar 2017 03:49:02 GMT

I think most people typically don't carry more than a few thousand dollars of CC debt. Sure there are outliers that do, or those that run into spending issues or lack of payment issues but I'm just making a generalization. That said, someone with say $5k in CC debt whether they have $60k in total credit limits or $200k in total credit limits is still going to have single-digit aggregate utilization. The person with $200k in credit limits verses the person with $60k in credit limits won't achieve any better of a score, all other things being equal, as their utilization percentages will both yield the best scoring scenario FICO wise.

Re: value of having high credit limits and other reasons

Chickenpotpie — Sun, 12 Mar 2017 06:00:27 GMT

Yes, my higher income does get me higher limits. I'm also (after having dealt with a bankrupcy) a hell of a lot more responsible and wiser. the bankrupcy was hellish. That time period taught me a lot, all in good ways! I'm more cautious and frugal. In the meantime went back to school, ended up with a higher income. I work a ton mind you but I'm decently compensated for it.

I live well within my means, but if an emercency cropped up I would have enough in cards to cover + savings.

Many of my cards were either really great starting limits, or, a great starting limits + organic CLI Amex is one i asked for a pretty big raise and they granted that. I don't see myself going higher but its all about what the future brings FWIW, I have a small stable, only 4 cards + paypal credit tradeline. More than that and it would be very hard for me to handle.

Re: value of having high credit limits and other reasons

Anonymous — Sun, 12 Mar 2017 06:24:24 GMT

@TheVig wrote:
Higher limits, beget higher limits.

While that is far from always true, it's also a bit circular for this discussion, "Why have high limits?" "Oh, so you can get more and higher limits..." Compare "Why do you encourage mice in your house?" "Oh, they breed so I get a lot more mice."

Re: value of having high credit limits and other reasons

Anonymous — Sun, 12 Mar 2017 06:43:36 GMT

@fritscher wrote:
Hi
i am relatively new here..I do see that many people like to keep increasing their credit limits on their cards..I am wanted to do that too but i know I would never use those high limits..Is the reason why to have low util for the most part or do many of you actually charge 15000 a month and pay off? also in order to get about 15000 do you have to have very high income.? just some thoughs..I have the urge to do cli on my current cards just to see if that will make my credit scores go up more etc
thank you for feedback

It comes down to utilisation. Util is the second most important factor in your credit score, behind only on-time payments. Any anything over 10% will affect your score.

So, in your example of having $15,000 in availabe credit, if you have more than $1500 reporting (not even carrying a balance, you can spend $1501 in a month, pay it all off, and still have your credit drop), it affects your score negatively.

And you should easily be able to get at least double your income in total ciredit lines. I am approaching 3 times my reported income.

Re: value of having high credit limits and other reasons

Anonymous — Sun, 12 Mar 2017 07:40:01 GMT

I have a lot of cards. That's because I love to have options when it comes to using them.
I have high limits. One card has about 30k CL on it. And sits at a zero balance. I have another card with 23k CL; no balance. And numerous other ones.

I have found that having a higher CL for me allows me to have higher CL on my new cards too. I just got a personal credit line for 15k at a credit union and it was easy to get.
We don't carry balances on our card and pay them off. We don't carry debt.
It's nice to have options when you need it. When I had to purchase some brakes and rotors for my Audi, I was able to put it on one of AmEx card with zero interest for the first 15 months without dipping into my savings, investments or checking.
Things like that makes life a little easier for me. Having options is important to me.

Re: value of having high credit limits and other reasons

Anonymous — Sun, 12 Mar 2017 10:44:38 GMT

Utilization freedom pretty much. Sometimes people pay in full and sometimes people want to be able make large spending at times spread out over time without it affecting their score.

Re: value of having high credit limits and other reasons

Gollum — Sun, 12 Mar 2017 11:30:18 GMT

@fritscher wrote:
Hi
i am relatively new here..I do see that many people like to keep increasing their credit limits on their cards..I am wanted to do that too but i know I would never use those high limits..Is the reason why to have low util for the most part or do many of you actually charge 15000 a month and pay off? also in order to get about 15000 do you have to have very high income.? just some thoughs..I have the urge to do cli on my current cards just to see if that will make my credit scores go up more etc
thank you for feedback

I think most people seek a credit limit increase because a credit limit increase can be requested/granted relatively easily, and a credit limit increase gives immediate gratification to those who are trying to improve their credit. Utilization percentages are the reason/excuse. Disregarding those with lousy credit scores in the sub-prime market, a credit limit increase from a particular bank is a mostly illusory "gain" because that particular bank can decrease the credit limit at least as fast as it increased it.

To a borrower, it's a paradox: the less "need" a person has for a credit limit increase, the more likely it is that person will be given a credit limit increase.

To a lender, it makes sense.

Re: value of having high credit limits and other reasons

fritscher — Sun, 12 Mar 2017 14:25:47 GMT

thank you all (so many of you) for your responses..I appreciate it alot..You answered my question.

Re: value of having high credit limits and other reasons

Anonymous — Sun, 12 Mar 2017 16:01:55 GMT

15000 is red line on sportbikes. It can go there but its not happy there for forever. Old people (banks) don't like the sound of it either.

If you have a 15k limit you should use no more than 5k to 6k of it if you can't pay down by the next month. From a scoring only standpoint. Going higher dings score and potentially lenders relationship.

Re: value of having high credit limits and other reasons

TheVig — Sun, 12 Mar 2017 16:09:58 GMT

I don't have a lot of Comenity cards so I can't relate to mice. Like others have said it's all about utilization padding.

@Anonymous wrote:
@TheVig wrote:
Higher limits, beget higher limits.
While that is far from always true, it's also a bit circular for this discussion, "Why have high limits?" "Oh, so you can get more and higher limits..." Compare "Why do you encourage mice in your house?" "Oh, they breed so I get a lot more mice."