topic Re: Credit card limits question in Credit Cards

Credit card limits question

jdxprs1 — Wed, 19 Apr 2017 23:12:56 GMT

Does having low limit cards hurt you when applying for new cards? Would it be better to close low limit cards if it wont hurt utilization?

Re: Credit card limits question

fltireguy — Wed, 19 Apr 2017 23:17:50 GMT

Let me say it like this - High limit cards will help you on your SL on new approvals...

Re: Credit card limits question

Anonymous — Wed, 19 Apr 2017 23:21:31 GMT

Doesn't seem so. In fact some of the members on this forum with the most cards have some of the lowest limits.

Re: Credit card limits question

red259 — Wed, 19 Apr 2017 23:34:51 GMT

@jdxprs1 wrote:
Does having low limit cards hurt you when applying for new cards? Would it be better to close low limit cards if it wont hurt utilization?

There is a sense that some lenders may not be willing to give you a credit card over 5k limit unless another lender has already done so. I'm not sure how true that is in reality but it does make sense that a lender may be more likely to give you a larger credit line if they have seen you appropriately handle high credit lines with other lenders. There is talk about some changes being made to some credit scoring with Vantage which may actually penalize people for havijhng too much available credit. It will be interesting to see how this plays out and how those of us who frequently apply for cards with high limits chose to handle their cards going forward.

Re: Credit card limits question

Anonymous — Wed, 19 Apr 2017 23:38:42 GMT

@jdxprs1 wrote:
Does having low limit cards hurt you when applying for new cards? Would it be better to close low limit cards if it wont hurt utilization?

Before I was established with BofA one of the reasons they gave me why my first cli was so low was the comparison they did with my present limits...so I will say that MAYBE it does play a part with some lenders.....

Re: Credit card limits question

Anonymous — Wed, 19 Apr 2017 23:40:01 GMT

@fltireguy wrote:
Let me say it like this - High limit cards will help you on your SL on new approvals...

Re: Credit card limits question

HeavenOhio — Thu, 20 Apr 2017 00:23:40 GMT

That's a great question, OP. I don't think there's a definitive answer. But my gut says that if your cards have a broad range of limits, the high ones will help you more than the low limits might hurt you.

Re: Credit card limits question

jdxprs1 — Thu, 20 Apr 2017 00:28:23 GMT

I currently have 5 cards with 1k-5k limits and 4 cards with limits under 1k. After my mortgage refi on June 1st I think I'm going to close my cards with limits under 1k.

All my cards that are 1k or more should be good growers.

Re: Credit card limits question

DeeBee78 — Thu, 20 Apr 2017 01:33:20 GMT

@red259 wrote:
@jdxprs1 wrote:
Does having low limit cards hurt you when applying for new cards? Would it be better to close low limit cards if it wont hurt utilization?
There is a sense that some lenders may not be willing to give you a credit card over 5k limit unless another lender has already done so. I'm not sure how true that is in reality but it does make sense that a lender may be more likely to give you a larger credit line if they have seen you appropriately handle high credit lines with other lenders. There is talk about some changes being made to some credit scoring with Vantage which may actually penalize people for havijhng too much available credit. It will be interesting to see how this plays out and how those of us who frequently apply for cards with high limits chose to handle their cards going forward.

It's absolutely true. Chase will sometimes deny someone for the CSP or CSR if they do not have another card reporting over $5K or $10K. As with any rule, there are exceptions, but it's happened before.

Re: Credit card limits question

Anonymous — Thu, 20 Apr 2017 04:06:40 GMT

@DeeBee78 wrote:
It's absolutely true. Chase will sometimes deny someone for the CSP or CSR if they do not have another card reporting over $5K or $10K. As with any rule, there are exceptions, but it's happened before.

Right, but it's the number of exceptions that is also important. We've also seen a lot of people get a CSR when their previously highest card with $3K, so "absolutely true" seems a little strong. But also the OP was asking about low limits along with higher limits, and I don't think we've had a case of Chase saying "Yes, we know you have some $15K cards from Citi, but you also have $2K from Target, so no CSP for you."

Re: Credit card limits question

Anonymous — Thu, 20 Apr 2017 09:21:25 GMT

I have Chase Freedom with 20k; Citi with 15k;
American Express with 15k and another with 32K
When I opened up a Chase sapphire I got 12k SL. And Discover for 4K and someone said that most Discover card start with a small SL. So I was surprised to get 4k.
So, yes, having a higher spending limit on other cards helps.

Re: Credit card limits question

jamesdwi — Thu, 20 Apr 2017 12:56:54 GMT

High limit cards beget high limit cards, but no, having a low limit card or a few low limit cards will not effect your ability to get high limit cards.

I have a $200 limit target card that won't grow, also a capital one card stuck at $750. But I still routinely receive cards with 5k, 10k, and even 20k SL. If you have decent income and a clean report, future lenders don't know why some of your cards have a low credit limit. You may of reduced them your self, you may not use the card much, you only keep the card because someone is an AU on the card and you keep the limit low on purpose, or any number of reasons. So future lenders can only look at your whole report and see, high limit cards in good standing, low UTL and paid on time, and then decide do we want to match those limits, or exceed them so the customer will like us and use us more. Lenders know if we give someone a card that isn't inline with existing high limits cards, the card may get used for a few months to receive the signup bonus if any and then migrate to the sock drawer or the back of the person wallet and will see little use, so they are compelled to give decent limits, if your report and income vs current obligations support it.

Note if you had recently done an AP spree or have other things happening on your report the lender may decide to give you a card, but with a toy limit like $500 to $2000 when you have other cards with high limits, I think of these cards as a warning, okay we want you as a customer but we don't trust you, show us you can be trusted and we may grow the card slowly over time. These low limit cards probably won't grow for the first couple of years, and if these cards are from lenders that require a HP for a CLI, I wouldn't worry about growing them, just use lightly and put in sock drawer and try for another card from the lender when you haven't done an APP spree or other issues such as high UTL or a recent late payment.

Re: Credit card limits question

K-in-Boston — Thu, 20 Apr 2017 14:41:15 GMT

Lots of great answers here. From my own experience, I know that my SLs became much larger as the number of $10k+ cards reporting became greater in number than under-$5k limits. On the other end of the spectrum, a quick search through this forum for "low limit hell" will quickly show you what typically happens when someone has a drawer full of $300-$700 cards. I've had concerns and still can't convince myself that even though I have like 8 cards reporting $20k+ limits and another 10 reporting $10k+ limits, somehow the $2300 Target MC and Kohl's $3000 limits (and now my AmEx Blue since I moved all but $1k to my SPG) have been harming me in some way.

Re: Credit card limits question

Anonymous — Thu, 20 Apr 2017 15:17:45 GMT

Greater limits on cards in your profile may help obtain greater SLs for new applications, yes. Many have reported this once they have a few larger limit cards in their wallet. However, it's important to recognize that at some point the opposite can happen. Once can obtain "too many" [relative to their profile/income] high limit cards that their exposure is spread thin. At this point a creditor that may have otherwise approved someone for a $15k limit could approve for only say $5k, simply because they see all of those other high limits and may either not feel competing is worthwhile or feel you've already got too many high limits to warrant another one.