topic Has anyone gotten burned by having too high CL? in Credit Cards

Has anyone gotten burned by having too high CL?

Anonymous — Mon, 22 May 2017 18:16:58 GMT

Has anyone out there been burned by having too much available credit? I've never really though about it before, but now approching nearly $100K of available CL, I am starting to ponder this. There are many of you out there with WAAAAY more available CL than me, so am curious to pick brains. I know It is supposed to be a myth that high CL's (even with low utl) impact the mortgage process but still find a lot of conflicting information on this. I'm planning on buying an additional property in the next year or so and am a tad concerned. Would love to hear personal experiences with this.

Re: Has anyone gotten burned by having too high CL?

-Cal- — Mon, 22 May 2017 22:59:59 GMT

$100k isn't a lot of available credit, but it is subjective to your income. There are cases where your total available credit can come into question.

For a real estate loan, my advice to you is not to worry about this until you find yourself in a situation where a loan officer or underwriter brings this up as an issue. They will provide you with an opportunity to make any necessary adjustments.

I have seen some people mentioned they've been denied for a trade line because they have too much available credit, but YMMY (re-read my first sentence).

Good Luck

Re: Has anyone gotten burned by having too high CL?

Anonymous — Mon, 22 May 2017 23:03:54 GMT

Thanks for the input. For reference, my annual income is approximately $150K. I would think $100K available credit (which is more than plenty for my needs - current utl around 2%) against my income wouldn't be considered risky, but am not sure.

Re: Has anyone gotten burned by having too high CL?

Anonymous — Mon, 22 May 2017 23:07:29 GMT

You are just fine. At 150k a year, you could safely have 300-450k in CLs....

Re: Has anyone gotten burned by having too high CL?

Anonymous — Mon, 22 May 2017 23:10:13 GMT

@Anonymous wrote:
You are just fine. At 150k a year, you could safely have 300-450k in CLs....

LOL that's just crazy to me. It is amazing that when you need money extended to you, no one is willing to give it. Yet, when you don't need it, everyone wants to give it to you

Re: Has anyone gotten burned by having too high CL?

Anonymous — Tue, 23 May 2017 00:57:27 GMT

@Anonymous wrote:
Has anyone out there been burned by having too much available credit? I've never really though about it before, but now approching nearly $100K of available CL, I am starting to ponder this. There are many of you out there with WAAAAY more available CL than me, so am curious to pick brains. I know It is supposed to be a myth that high CL's (even with low utl) impact the mortgage process but still find a lot of conflicting information on this. I'm planning on buying an additional property in the next year or so and am a tad concerned. Would love to hear personal experiences with this.

Income has a lot to do with it. If you earn, say $40K a year and already have $200,000 in available credit, a lender could deny you based on insufficient income.

Re: Has anyone gotten burned by having too high CL?

Anonymous — Tue, 23 May 2017 01:04:06 GMT

Your limits to income ratio is fine. At our house our only concern has been card theft. I once had some one steal a blank check on an account with $20K in overdraft rights. In 3 days the person used it before I even knew it, $20K in overdrafts by having checks printed and paid to them selves. My dw locks her purse in the office safe because of her Amex card and Spark card limits. Both have high limits.

Re: Has anyone gotten burned by having too high CL?

Themanwhocan — Tue, 23 May 2017 01:52:25 GMT

@Anonymous wrote:
@Anonymous wrote:
You are just fine. At 150k a year, you could safely have 300-450k in CLs....
LOL that's just crazy to me. It is amazing that when you need money extended to you, no one is willing to give it. Yet, when you don't need it, everyone wants to give it to you

"A bank is a place that will lend you money if you can prove that you don't need it" - Bob Hope

Re: Has anyone gotten burned by having too high CL?

Ghoshida — Tue, 23 May 2017 01:59:00 GMT

@Anonymous wrote:
@Anonymous wrote:
You are just fine. At 150k a year, you could safely have 300-450k in CLs....
LOL that's just crazy to me. It is amazing that when you need money extended to you, no one is willing to give it. Yet, when you don't need it, everyone wants to give it to you

And therefore you should build credit when you can, so that in case of an event, you aren't blindsided.

While credit is not the same as an emergency fund, a large CL provides a cushion against dipping scores when suddenly your utilization is a bit high.

Re: Has anyone gotten burned by having too high CL?

Anonymous — Tue, 23 May 2017 06:22:38 GMT

I've wondered about this. I'm currently at $103.5K CL vs $105K income and worry it is too much available credit. It is more than I'll ever need. I've thought about closing a card I don't really need anymore in case it affects me getting a card I do want.

Re: Has anyone gotten burned by having too high CL?

austinguy907 — Tue, 23 May 2017 07:15:06 GMT

100K is subjective and with your income being 150K+ you're fine.

Mortgages are more concerned with your debt not your CL's. If you have a high debt load your min payments go up and thus reduce your ability to borrow more for the house.

The only experiences where having high CL's is an issue is with more conservative banks and CU's that look at the bigger picture when reviewing your reports for a new account or sometimes even for a CLI.

I've got over 100K+ in limits and haven't run into any issues with mortgages the last 3 times I went through them in the last few years.

Re: Has anyone gotten burned by having too high CL?

UncleB — Tue, 23 May 2017 07:36:57 GMT

@Anonymous wrote:
I've wondered about this. I'm currently at $103.5K CL vs $105K income and worry it is too much available credit. It is more than I'll ever need. I've thought about closing a card I don't really need anymore in case it affects me getting a card I do want.

It's always possible, but for reference I'm at just over $200k available credit with income substantially lower than yours, so I suspect you have nothing to be concerned about... at least for now.

Re: Has anyone gotten burned by having too high CL?

Anonymous — Tue, 23 May 2017 11:23:09 GMT

I've actually been wondering about what a suitable level of available revolving credit is for me. I have an income of just about $50K and, being a government employee, should get my next step increase of some $1.3K (depending on performance) in February. Right now I have $11.2K in revolving credit plus another $15K or so in installment loans (car and student). Going by what I see in this thread, it seems like $100K - $150K is probably the level I should eventually be aiming at (being mindful, of course, to keep utilization low and payments up to date). I'm keeping my near-term aims modest considering that I'm in rebuilding - mainly, I just want a good rewards Visa with a decent SL more or less equivalent to my new Overstock store card (that is, around $4K).

Re: Has anyone gotten burned by having too high CL?

Anonymous — Tue, 23 May 2017 11:38:28 GMT

@Anonymous wrote:
I've actually been wondering about what a suitable level of available revolving credit is for me. I have an income of just about $50K and, being a government employee, should get my next step increase of some $1.3K (depending on performance) in February. Right now I have $11.2K in revolving credit plus another $15K or so in installment loans (car and student). Going by what I see in this thread, it seems like $100K - $150K is probably the level I should eventually be aiming at (being mindful, of course, to keep utilization low and payments up to date). I'm keeping my near-term aims modest considering that I'm in rebuilding - mainly, I just want a good rewards Visa with a decent SL more or less equivalent to my new Overstock store card (that is, around $4K).

I think a good rule for available credit would be to have a total credit limit of 11X whatever your likely monthly spend would be. This way, you would NEVER be over 9% across the board and if you juggle your cards well you would never be 9% over any individual card. 12X spend might be even wiser. So if you spend $2000 on your cards in a month, CLs of $24000 on useful cards is a good starting point.

The next rule step would be having one card that is 12X your monthly spend in size, so having one CL of $24,000 against $2,000 monthly spend means you'd never break the 9% utilization on one card FICO scoring rule.

Having 5-6 cards at 12X monthly spend would be a goal -- this means you'd be able to maximize rewards, reduce FTFs, etc, and play the game the best.

Only you know what your monthly spend is and what you can afford to pay monthly.

My total CL is about 50% of my actual monthly spend, so I send tons of payments constantly to keep my utilization low and CL available. In July I will be spending about 400% more than my CLs across the board, so lots and lots and lots of payments, ugh. Hoping for the FICOs to jump up soon so I can actually qualify for some decent CLs unsecured.

Re: Has anyone gotten burned by having too high CL?

HeavenOhio — Tue, 23 May 2017 11:58:12 GMT

I can't say I was burned, but I had a recent CLI request for $7,000 countered with $6,200. $6,200 "happened" to bring my total credit limits to an even $60,000.

I don't think the company was concerned about $60,000 in and of itself. My guess is that it was concerned that 75% of it was on cards acquired within the previous eight months.

joe8185's idea of having an eventual goal is prudent. I was likely moving a little too quickly… although I can't say I had a lot of control over the fact that one of my new cards had a limit of over $20,000.

I dumped a couple of retail cards that weren't doing me any good, so my total limits are now around $45,000. I think $75,000 or so is where I'd probably want to settle in. That would include three cards in the $15-20k range, a few lower-limit oddballs that would fill in some rewards gaps, and a couple of ancient cards that I'll hang onto due to their ages.

Re: Has anyone gotten burned by having too high CL?

digitek — Tue, 23 May 2017 12:46:01 GMT

I actually called Chase recently and reduced the CL on my CSR from 24k to 10k.

I can not ever imagine myself needing to float 24k, and if I did need it I guess I could ask for an increase. Total across all cards is still ~35k or so, which is more than enough. I know people say that it shouldn't matter, but I didn't want it to be an issue when applying for cards or loans in the future. I bring in ~130k annually.

Credit Limits do not impress me, and if anything, they are just another temptation by the CC companies to try and get you to spend more than you can afford at the time. I have a hard enough time not buying dumb **bleep** as it is =D

Re: Has anyone gotten burned by having too high CL?

newhis — Tue, 23 May 2017 13:30:02 GMT

Related to high limit cards are internal limits.

My 3rd Chase card SL was 15K, 8 months later with perfect payment I got the CFU with $500 limit.

Re: Has anyone gotten burned by having too high CL?

kugel — Tue, 23 May 2017 14:35:17 GMT

My income is 80k and rental income 60k do I have room for more credit ? Now I have 118k?

Re: Has anyone gotten burned by having too high CL?

happypill — Tue, 23 May 2017 14:43:45 GMT

Something worth mentioning is that some lenders have internal limits that you might hit up against - which will vary according to your income & credit worthiness (and possibly how much money they feel they can make off you). So while someone with a $150k annual income might be able to easily get $300k or more in total credit limits, an individual lender may only allow $50k exposure or something. I think Chase, NFCU, Pendfed and others are all known to have internal limits, so if you want multiple cards with a certain company, you may have to consider that. Yet another reason why it is smart to diversify.

Re: Has anyone gotten burned by having too high CL?

newhis — Tue, 23 May 2017 15:32:26 GMT

@kugel wrote:
My income is 80k and rental income 60k do I have room for more credit ? Now I have 118k?

You can easily go to 200K and more, you just need to diversify.