topic Re: Pros and Cons of CL Increases... in Credit Cards

Pros and Cons of CL Increases...

Anonymous — Thu, 19 Mar 2009 11:33:38 GMT

morning all. i'm wondering what are the general pros and cons of requesting a credit limit increase? i currently have 4 ccs (one of which is a gas card). the card i'm thinking of requesting an increase on is BOA, which has a zero balance.

Re: Pros and Cons of CL Increases...

smallfry — Thu, 19 Mar 2009 11:55:28 GMT

Maybe nothing maybe a CLD instead. Ya never know these days.

Re: Pros and Cons of CL Increases...

tralyn05 — Thu, 19 Mar 2009 19:42:58 GMT

Con-- They pull your credit for a CLI --- example--chase

pros--Boa and Citi ...amongst others do not...never hurt to try even tho some say that it might bring attention to your account for a CLD

Re: Pros and Cons of CL Increases...

CreditAble — Thu, 19 Mar 2009 20:02:53 GMT

@Anonymous wrote:
morning all. i'm wondering what are the general pros and cons of requesting a credit limit increase? i currently have 4 ccs (one of which is a gas card). the card i'm thinking of requesting an increase on is BOA, which has a zero balance.

What are the current limits and balances on your other cards? What is your limit on the BoA card? How much was the most you ever borrowed on the card? What is your stated household income?

I (and others) might venture an opinion as to the advisability of "rolling the dice." and risking a CLD.

Re: Pros and Cons of CL Increases...

Anonymous — Mon, 23 Mar 2009 17:56:57 GMT

@CreditAble wrote:
What are the current limits and balances on your other cards? What is your limit on the BoA card? How much was the most you ever borrowed on the card? What is your stated household income?

I (and others) might venture an opinion as to the advisability of "rolling the dice." and risking a CLD.

card 1 -- 0 of 2500

card 2 -- 2700 of 5600

card 3 -- 0 of 4700 (BoA) -- was maxed 2 yrs ago.

card 4 -- 6000 of 6500 -- ouch!

Message Edited by MsDonesha on 03-23-2009 01:56 PM

Re: Pros and Cons of CL Increases...

Anonymous — Mon, 23 Mar 2009 19:42:29 GMT

pro, it'll increase your availabe credit thus decreasing your utilization, which affects FICO Score positively.

con, it may be a hard inquiry on your cr, which affects FICO Score negatively.

In the end you never know the overall affect. I had an increase on one of my credit cards and this resulted in one of my other cc being subject to a CLD, because the access to more credit made me more likely to default on their card, whatever.

IMHO, if you don't need the credit for anything, don't get an increase. You may be more disciplined than myself but the temptation is there to spend when you have it available.

If you decide to request the increase, let us know the effect on your Score.

Re: Pros and Cons of CL Increases...

KingAdrock — Mon, 23 Mar 2009 20:23:06 GMT

BofA softs for CLI requests and they have a reputation for being generous, even in these bad financial times. Unless your situation has changed for the worse since you opened the card (or since your last CLI) I don't see a downside.

Re: Pros and Cons of CL Increases...

CreditAble — Tue, 24 Mar 2009 01:47:58 GMT

@Anonymous wrote:
morning all. i'm wondering what are the general pros and cons of requesting a credit limit increase? i currently have 4 ccs (one of which is a gas card). the card i'm thinking of requesting an increase on is BOA, which has a zero balance.

BoA might give you a credit limit increase if you can transfer the $6,000 from card #4 to the BoA card. I wouldn't do a BT unless you can get the limit raised to $10,000. Of course the promo rate would have to be worth moving the balance. Your income will be the deciding factor. I don't think BoA will CLD just because you ask for a CLI. Your Bank of America CL isn't that high. If you have a low income, however, BoA might think you cary too much debt and want to limit its risk. It is hard to be an Egyptian these days.

If you can get the CLI and transfer the whole balance from card #4, definitely don't revolve balances on that card in the future. Your scores will probably go up somewhat.

The biggest "con" that is related to asking for a CLI is it could lead to going deeper into debt. I would not recommend asking for any increases unless you have a game plan to substantially pay down your overall debt by the time all interest rates go sky high next year.

Message Edited by CreditAble on 03-23-2009 09:47 PM

Re: Pros and Cons of CL Increases...

Anonymous — Tue, 24 Mar 2009 10:33:37 GMT

fyi: BoA CL increase can be requested every 30 days per CSR i spoke with yesterday...

Re: Pros and Cons of CL Increases...

Anonymous — Tue, 24 Mar 2009 11:11:45 GMT

@CreditAble wrote:
BoA might give you a credit limit increase if you can transfer the $6,000 from card #4 to the BoA card. I wouldn't do a BT unless you can get the limit raised to $10,000. Of course the promo rate would have to be worth moving the balance. Your income will be the deciding factor. I don't think BoA will CLD just because you ask for a CLI. Your Bank of America CL isn't that high. If you have a low income, however, BoA might think you cary too much debt and want to limit its risk. It is hard to be an Egyptian these days.

If you can get the CLI and transfer the whole balance from card #4, definitely don't revolve balances on that card in the future. Your scores will probably go up somewhat.

The biggest "con" that is related to asking for a CLI is it could lead to going deeper into debt. I would not recommend asking for any increases unless you have a game plan to substantially pay down your overall debt by the time all interest rates go sky high next year.

that's what i was thinkin about doing, if i could get that large of an increase......although, i will add that card #4's APR is only 9.9%.....BoA's is 10% so basically even and not an issue when deciding on whether or not to transfer that 6K balance. my income is 65K and one thing i left out (oops) that may be of importance is that this is a joint account with my father....this is his ONLY CC, besides a gas card which has a ZERO balance and his income is close to 80K. i'm not sure when the last CLI was, because dad was the only one to use the card until 2005 when he paid if off and gave me sole use (I'm only 28).....this account will be 21 yrs old in June.

to add, i will be applying for a mortgage loan in about 2 months -- cc utilization is the only area of my credit i'm worried about having issues with in underwriting....and just looking for a way to minimize the possibility of having an issue. i'll be purchasing a home solo and in a high cost living area (Northern VA), so trying to make sure i'm a good position....

Re: Pros and Cons of CL Increases...

CreditAble — Tue, 24 Mar 2009 14:18:27 GMT

@Anonymous wrote:

that's what i was thinkin about doing, if i could get that large of an increase......although, i will add that card #4's APR is only 9.9%.....BoA's is 10% so basically even and not an issue when deciding on whether or not to transfer that 6K balance. my income is 65K and one thing i left out (oops) that may be of importance is that this is a joint account with my father....
First ask BoA if it can give you a 12 month promo rate of between 0% & 3.99% for a $6,000 BT. Ask for a BT fee cap of $75. Then ask for a CLI to $10,000-$12,000 as a total credit limit. Because your father will also be on the hook for the $6,000 you might get the deal.

You do realize that your father's credit score will suffer somewhat for utilization. You do know that doing an Egyptian dance right before applying for a mortgage is a little risky. I myself would simply pay $3,000 of the balance on card #4. Then again I wouldn't apply for a mortgage If I had any debt at all. I would wait until I could pay off all revolving debt.

I wish you well no matter what you decide to do.

Message Edited by CreditAble on 03-24-2009 10:18 AM

Re: Pros and Cons of CL Increases...

Anonymous — Tue, 24 Mar 2009 14:27:58 GMT

Is this a JOINT ACCOUNT, or are you an AUTHORIZED USER? What does your CR "Responsibility" line say for this trade line? There is a difference. If you are only AU, then your income and credit is not a factor in any decision and you may not even be eligible to do a Balance Transfer from you personal card to the AU card.

Re: Pros and Cons of CL Increases...

Anonymous — Tue, 24 Mar 2009 14:44:22 GMT

CreditAble -- Thanks. All of the possibilities of what could happen are making me shy away a little from doing ANYTHING until I buy my home. With the CLI I would have ZERO intention of using it. I haven't used the BoA card once since the end of 2006...

txjohn -- I'm aware of the difference; it's JOINT. Although now that it's at a zero balance dad is thinking about removing his name off of the account altogether since he doesn't use it. I'm advising him against it as it's his first major credit card also and will drastically lower his "length" of credit history without it....

Re: Pros and Cons of CL Increases...

CreditAble — Tue, 24 Mar 2009 16:27:07 GMT

@Anonymous wrote:
I haven't used the BoA card once since the end of 2006...

Use the card immediately for one ore two hundred dollars, let the statement drop so the balance shows in your credit files. Once the balance reports PIF before the next statement drops. You can then sock drawer the card until you obtain your mortgage.

You might get a small FICO ding until the next statement reports a $0 balance. On the other hand you might get a FICO bump by using an inactive card especially if the CL is not being factored into your utilization.

You may not at present be receiving the full value of the BoA card for FICO scorning since it might fall into an "Inactive" category. The card might also be in danger of being closed for inactivity.

Once you use the card, BoA might even offer you some kind of "Luv" to use the card some more.

@Anonymous wrote:
it's JOINT. Although now that it's at a zero balance dad is thinking about removing his name off of the account altogether since he doesn't use it. I'm advising him against it as it's his first major credit card also and will drastically lower his "length" of credit history without it....

Keep in mind that Bank of America is one of the few banks which will allow a (primary) joint holder to remove himself from a credit card account without closing it. Of course your credit profile (soft pull) would have to be approved by BoA to be worthy enough to assume sole responsibility for the account. I wouldn't take that step until your other balances are substantially paid down or off. Although BoA probably won't pull a hard inquiry for the conversion, anything is possible. Definitely don't rock that boat until after obtaining the mortgage.

If you decide to do the sole responsibility conversion in the future, you may simply add your father as an AU afterwards. Taking that step would allow you to add or remove him from the account as his credit needs might change even later in life.

It you are going to avoid asking for CLIs until you get the mortgage, can you find an extra $3,000 to pay on card #4? Perhaps a family member might provide a 6-12 month term loan? After 6 months of a mortgage reporting and paying down your credit card balances, you might get a decent CLI and low teaser rate on the BoA card.