topic Re: Credit Card Management...So many cards...So many limits in Credit Cards

Credit Card Management...So many cards...So many limits

alexgold9393 — Tue, 27 Aug 2019 18:56:35 GMT

I have a question to the guys and gals who have over 10 credit cards with good limits (15K+), Im looking at your signatures and I see you have amazing limits and still requesting CLIs all the time and getting new cards. How do you manage these cards do you actually spend 20-25k/month on all different cards to keep these limits.

I don't understand how banks can give a higher limit to people that are not taking advantage of the limits given to them. Can some of you "power users" share some thoughts on your strategies with these banks.

Thanks in advance.

Re: Credit Card Management...So many cards...So many limits

iced — Tue, 27 Aug 2019 19:12:39 GMT

@alexgold9393 wrote:
I have a question to the guys and gals who have over 10 credit cards with good limits (15K+), Im looking at your signatures and I see you have amazing limits and still requesting CLIs all the time and getting new cards. How do you manage these cards do you actually spend 20-25k/month on all different cards to keep these limits.

I don't understand how banks can give a higher limit to people that are not taking advantage of the limits given to them. Can some of you "power users" share some thoughts on your strategies with these banks.

Thanks in advance.

It's not always about how much you spend each month, but rather a risk assessment of your ability to spend and pay off that spend should you need to. Chase doesn't care if I don't use all of my limit with them; they care more that I have demonstrated that should I need to spend my CL in a month with them, I can pay that all back.

I spend maybe 3% of my Chase CL each month, but I have spent as much as 20% in a month and they've seen enough of my financial records and assets to know I could repay 500% of my CL should the extraordinary need arise. That, coupled with a good payment history with them, means should I go asking for more credit from them, they're very likely to extend it. It's minimal risk to them, and the hope they have is that with that extra padding maybe I'll carry a balance now and then.

Re: Credit Card Management...So many cards...So many limits

kilroy8 — Tue, 27 Aug 2019 19:17:41 GMT

I just do my normal spend, and don't even make a big dent in my limits. I PIF to zero all but 2 cards before statements cut.

I manage them through Quicken 2014 manually, updating balances daily so my cash flow is always known, and I have reminders of what is due when.

Re: Credit Card Management...So many cards...So many limits

staticvoidmain — Tue, 27 Aug 2019 19:45:59 GMT

This dependes on the bank. Some banks will CLD you for not utilizing your limit, or even close your account for non-usage after some time.

Re: Credit Card Management...So many cards...So many limits

Anonymous — Tue, 27 Aug 2019 20:25:09 GMT

I rotate different cards and every once in a while carry a balance on a 0% or low % promo rate balance transfer and show that I can pay it off.

I come nowhere close to utilizing my entire CLs, but I've probably charged all of my cards up to 60% of their limit and paid them back down within the last year.

Re: Credit Card Management...So many cards...So many limits

wasCB14 — Tue, 27 Aug 2019 21:04:34 GMT

Ebills help. Electronic statements and due date reminders get delivered to my Schwab checking account. Chase is my only card issuer that doesn't support them.

Spending is lumpy but there can be some months with low or (rarely) mid 5 figure spend.

Re: Credit Card Management...So many cards...So many limits

Aim_High — Wed, 28 Aug 2019 01:19:57 GMT

@alexgold9393 wrote:
I have a question to the guys and gals who have over 10 credit cards with good limits (15K+)
How do you manage these cards ... to keep these limits.
I don't understand how banks can give a higher limit to people that are not taking advantage of the limits given to them

There is a lot of information people share about their profiles on My Fico. Unfortunately, one of the downsides of a website like this is that there is also a LOT you won't see about the other users. Consequently, comparing your profile to theirs can lead to confusion or frustration. When lenders approve credit lines or APRs, there is much more information in the applicants' financial lives taken into account sometimes beside the most obvious data points that we share here.

While I don't consider my limits super-high, I think I've done okay and I'm actually working to increase mine a little further. I don't really need limits over about $5K to $10K across all my cards together, as I don't charge more than that in a month and I always PIF. However, like most people I like having the flexibility of more credit and I've become acutely aware of just how much the credit bureau penalizes us with adverse utilization scores if you actually USE your credit. It just seems backwards to me that they extend "x" amount of credit line but then ding you when you start to use even 1/3 to 1/2 of what they approved you to use!!

To answer your question, no I do not actually USE a good portion of my credit lines to get them this high or to keep them there.

From my observation, there are a few factors that those with higher limits share in common. Pardon the length of my posting, but I think I have a lot to share since this has been a topic I have studied as well. I've identified no less than TEN variables that play into someone's credit limits, so it's a complicated topic to say the least!

Age of Credit. When looking at other MyFico’ers, I think the most overlooked factor by many on these forums is account age. Some of us have not just spent years building our credit files; we’ve spent many decades. I have had credit lines for over 35 years. If someone is in college or in their 20s and wants to build credit lines like these, they may just need to be patient and lower their expectations. Nobody goes from $500 to $5,000 to $50,000 credit lines overnight. It takes time, and usually a lot of it.

If anything, “gardening” your credit is much under-rated. In fact, most consumers spend much more time “gardening” their credit without even really tracking or thinking about it like we do on My Fico. Lenders like to see consumers who are more stable and have been building their credit report over the long-term. They will reward that, slowly and surely, and even without you having to push for it.

Moral of the story: Apply for credit accounts with the long-term in mind. Don’t just be a SUB-chaser. Of my accounts, I have four that have been open between 19 and 26 years and another open for over 10 years. All five of my oldest accounts are some of my most important financial possessions since I cannot replace them easily. They may not always give me the highest cash back rewards when I use them, but that is secondary to me compared to their overall value. I have product-changed all five of those oldest accounts at least once in their life as the credit world has changed, but I’ve managed to keep the account age. That provides a strong ‘anchor’ to my AAoA.

Spending Patterns. There are many people in the business world (corporate or self-employed) who manage to put sizeable spending through on their personal credit accounts on a regular basis much beyond what their income will support for personal monthly charges. If you are spending enough on an account, lenders will often see the “need” for more credit during regular reviews and increase limits more easily than if someone was using only a small bit of their limits, regardless of the credit age factor I just mentioned. While I don’t suggest running up balances just to try to justify higher limits, there are other ways to do this. I read recently about another MF member who was using his card to pay for college expenses, which he would be able to pay off with student loans or bank accounts quickly. This was to get the points/cash but also to run large balances to demonstrate responsibility. When my finances were not in as good of shape as they are now, I ran up high utilization on accounts sometimes taking advantage of balance transfer offers. Those have been paid off for many years, but that may have encouraged my lenders to offer me more credit recently in hopes that I will use them again. Remember that if you choose to do something like this, utilization dings have a pretty short half-life so if you pay them off fairly quickly, they won’t have a big long-term impact.

High Credit Scores. You rarely see anyone with those high limits who doesn’t also have very good to excellent credit. Most profiles that I have seen with predominantly high limits of $25K+ are probably in the 760+ range across-the-board. Keep in mind that the scores may not get you the high limits without either the credit age or spending patterns above, but they are a vital part of the equation. There are many young credit accounts with higher scores but thin files. That is far from equal to a higher score with a thick file.

Incomes. Credit limits are basically determined by the banks’ determination of a combination of two factors: (1) your ability to repay and (2) the amount of credit you need or that they think you might be able to use without risking default. High incomes play into this in both ways. If you have high income, you will probably be more likely to want to spend more money every month than someone with lower income. You also have the ability to repay large balances more easily, regardless of other debts. I imagine banks have a formula for the maximum limits they will approve on a single card or to a consumer based on a percentage of their income. Some forum users have incomes well above average, often well into six figures.

Debt-to-Income ratio. Reasonable or low DTI plays into your ability to repay. If you have massive student loans or a mortgage that your realtor “told you could afford” but which pushes the maximum for which you could get approved, the bank will see you are closer to being overextended and be more conservative with credit lines, regardless of income. Look at your overall debts, not just your revolving credit card utilization, from the standpoint of a lender. Don’t overextend your ability to borrow.

Assets with the Lender. From what I have read, people with the absolute ultra-highest limits (perhaps $100K+ on a single card) typically have large investments with the banks that offer them those limits. (For example, look up the invitation-only J.P. Morgan Chase Palladium Card.) Basically, the banks may consider that a security deposit of sorts against default. I have even heard about some banks approving someone for very high limits but requiring a certain deposit level be maintained at the bank. So if you want high credit limits from a bank, consider doing business with them in other ways. Build a relationship. You don’t have to have millions deposited to benefit from this strategy. Open banking accounts. Buy CDs or money markets if they are competitive places to store your money. Let them see your financial life in other ways. If you can afford to do so, consider their investing portals or wealth management services. Bank of America will even pay extra on your credit card rewards if you are in their Preferred Rewards program. (10% bonus for having a checking account; 25% bonus with $20K in balances; 50% bonus for $50K and 75% for $100K. That includes money you’ve got invested with Merrill Lynch, so it doesn’t have to be sitting idle in a low-rate bank savings.)

Use your credit regularly and responsibly. I said I don’t use the majority of my credit lines, and that is true. But I do use ALL my cards and I use them regularly. Lenders are more likely to approve credit limit increases on accounts which show regular activity, even if it is for routine purchases. And of course, always pay all your accounts on time since payment history is critical to good FICO scores. You’re showing them your interest in using the card and you’re showing them your ability and commitment to repay them consistently. That builds trust.

Leverage your limits. Lenders are well aware of how much credit you have from other sources and what your other limits are, so think about your limits as a whole. I personally believe lower limits begat lower limits and higher limits begat higher limits. I wanted to simplify my credit life and focus on fewer, higher-quality cards so I don’t have lower-limit or store account cards anymore. In my opinion, low limits on a bunch of cards may drag down what you could be approved for on a more valuable card. New account limits often mirror the existing limits on your current cards, within a general range. So over time, try to raise your limits with each lender. If you need to, consider a PC to a better or more useful product so that you keep your account age. Or consolidate accounts to grow the credit line on your oldest account, if the lender allows that. Close lower-limit cards selectively as they become less important or useful to you, especially if the lender “buckets” you from increases. As you grow your average, lowest, and highest limits, you will see probably see other lender follow each other as you play them off each other with credit line increases or new apps. They may not want to be the first one to give you that $25K but if you have other lines already showing you can manage that amount successfully, they won’t want to be left “out in the cold” compared to the competition. It takes time, but if you consistently work it, your limits will likely grow as long as you have the age of credit, income, scores, and/or spending patterns to support it also. Sometimes your lenders need some encouragement to raise your limits.

Target the right Lenders for the best lines. Don’t expect the highest limits for all lenders. Each one has their own standards. I have two cards which I’ve been told are at their maximum limits at $25K (per bank policy.) Lenders may have a limit for a particular type of card or how much they will lend to one consumer in overall credit lines. This is probably just based on the assets they have to support those credit lines, so don’t expect monster limits from smaller banks or credit unions. Navy Federal is a credit union, but it is the largest in the US so has plenty of assets to support healthy starting limits and line increases. Same for the large national banks like AMEX, Chase, Bank of America, Discover, Capital One, Wells Fargo, US Bank, etc. However, even among the large banks, some are easier to get large limits. Capital One is apparently pretty conservative and low-lending, for example. Chase is typically moderately-conservative, but they approved me for well over $130K in total credit lines in past year (spread over 6 cards) before I hit an internal ceiling with them. From what I’ve seen and read, AMEX, Bank of America, and Discover are easier to build large limits with over time as you build your credit relationship with them. (My Discover and BofA accounts are two of my highest limits but also two of my oldest cards.)

Target the correct cards. Each lender probably has some general ranges of credit limits they will authorize for a certain type of card, not only to start but at upper limits. Each lender has a “hierarchy” of cards based on their selectivity. While they may start you at $1K to $5K on some entry-level cards, on others they might offer $5K to $10K for example. It appears to me that TRAVEL-related cards are typically the most selective as a general rule and often offer the highest limits. One of my highest SLs I ever received was $35K on my Chase Sapphire Reserve. (Any of the cards that have $400 to $600 AFs probably have higher limits. Chase Sapphire Reserve. US Bank Altitude Reserve. Citi American Airlines Platinum Select World Elite Mastercard. Chase United Club Mileage Plus Visa. Citi Prestige. etc.)

Here is more about my long-term strategy.

You might notice I have two cards with $10K limits: Chase Marriott Bonvoy Boundless and Chase World of Hyatt. Those both started at $33K and $30K respectively just a few months ago before I moved Chase limits between cards. I am not a huge customer of either chain, so I don’t think I’ll find enough benefit to keep them in my wallet for the long-haul. Too much to keep up with for the benefits. I’d rather focus hotel charges on my CSR. However, I got them for two reasons: (1) Both had great SUBs but moreover, (2) I planned to eventually move their credit lines and then to close them both within the first year to further increase my CSR/CFU/CF credit lines as part of my leveraging. Chase is slow to give increases sometimes, even after doing a Hard Pull, but it’s easier to get them to let you keep limits you consolidate from other cards. I also have a fairly low credit line ($9K) on my Chase INK but this is because it was a business card that I claimed a small sole proprietorship for and that was all the credit line that was justified or needed.

I’m due for another CLI on my Capital One QS in a few months so will be putting some spend on it for a few months and then reapplying. I hope to get it to $25K on next request. They’ve been a pain but it started at an insultingly low $1K limit (for where I was at the time), and consequently I didn’t even use it for a few years! (I got it for a BT offer and then didn’t even use it for that since the SL was so low.) But now, there are a lot of things I like about Capital One and would like to maintain that account.

Goldman Sachs just gave me only $20K on my new Apple card but the lowest APR at 12.99%. I was surprised they didn’t offer me a little more, but I hope to grow it to $25K plus in the next year with CLIs.

Other than that, all my cards start at $25K. My goal is to have my smallest personal lines of credit at $25K and to leverage a few of my cards well over $50K before I’m done. And to have those lines of credit diversified among several larger banks. I’m considering moving some investments to Bank of America or Chase to solidify those banking and credit relationships.

Quality over Quantity is my long-term goal.

Re: Credit Card Management...So many cards...So many limits

Anonymous — Wed, 28 Aug 2019 11:11:18 GMT

^^^ and that right there is Credit Strategy 101. @Aim_High, don’t drop the mic, just take it home with you. Not sure anything else needs to be said after that.

Re: Credit Card Management...So many cards...So many limits

kdm31091 — Wed, 28 Aug 2019 11:51:59 GMT

I have some cards like my Discover with unneccesarily large limits that I will never get anywhere near. There's always the chance a lender will decrease your limit if they find you're constantly not using it, especially as we head into a credit tightening period. I don't go out of my way to heavily use a card to please a lender. The limit isn't my property; it's theirs to take away if and when they want. So it is what it is. My utilization will remain low regardless so it really does not matter.

Banks may extend you a large limit, but they don't expect you to routinely max out that limit. It's just a threshold they are comfortable with based on your income, credit history, etc.

Re: Credit Card Management...So many cards...So many limits

alexgold9393 — Wed, 28 Aug 2019 19:35:11 GMT

@Aim_High wrote:
Quality over Quantity is my long-term goal.

Amazing Answer! Thank you

Re: Credit Card Management...So many cards...So many limits

Anonymous — Wed, 28 Aug 2019 20:07:52 GMT

@alexgold9393 wrote:
@Aim_High wrote:
Quality over Quantity is my long-term goal.
Amazing Answer! Thank you

While I agree with most of it (perhaps the key difference being I don't agree with making decisions based on the long term!) my other piece of advice would be:

Don't view credit limits as a "real" asset.

Having $1M in TCL is very different (and not nearly as useful!) as having $1M in deposit accounts. As KDM says, it is the issuers to give and to take away. IMO some people focus much too much on growing CLs: at the end of day success may not change anything (you still have to fit spending to income).

Re: Credit Card Management...So many cards...So many limits

wasCB14 — Wed, 28 Aug 2019 20:58:33 GMT

@Anonymous wrote:
While I agree with most of it (perhaps the key difference being I don't agree with making decisions based on the long term!) my other piece of advice would be:

Don't view credit limits as a "real" asset.

Having $1M in TCL is very different (and not nearly as useful!) as having $1M in deposit accounts. As KDM says, it is the issuers to give and to take away. IMO some people focus much too much on growing CLs: at the end of day success may not change anything (you still have to fit spending to income).

In principle, $1M at 0% for 20 or 30 years would be worth close to $1M in deposits...

...but, realistically, getting that much credit takes time...and more likely someone with $1M in TCL will have only a tiny share of it at 0% for a few months. Much harder to do anything with.

Very few cards are worthy of significant spend IMO. I like big CLs, but only care about them on a few select cards.

Re: Credit Card Management...So many cards...So many limits

SouthJamaica — Wed, 28 Aug 2019 23:18:00 GMT

@alexgold9393 wrote:
I have a question to the guys and gals who have over 10 credit cards with good limits (15K+), Im looking at your signatures and I see you have amazing limits and still requesting CLIs all the time and getting new cards. How do you manage these cards do you actually spend 20-25k/month on all different cards to keep these limits.

I don't understand how banks can give a higher limit to people that are not taking advantage of the limits given to them. Can some of you "power users" share some thoughts on your strategies with these banks.

Thanks in advance.

I don't spend much.

But I do use each card each month if it's a card I care about keeping.

Re: Credit Card Management...So many cards...So many limits

Anonymous — Wed, 28 Aug 2019 23:55:21 GMT

@alexgold9393 wrote:
How do you manage these cards do you actually spend 20-25k/month on all different cards to keep these limits.

I don't understand how banks can give a higher limit to people that are not taking advantage of the limits given to them.

No one that I know of spends $20k-$25k per month on cards. That's like $250k-$300k per year, which of course would take an income greater than that to achieve. Those capable of that fall into under 1% of the population, no doubt.

I think it's very silly that banks extend monster limits to many people (myself included) that barely use even a small percentage of such limit(s).

If banks actually set limits taking spend/usage into strong consideration, you'd see plenty of forum members around here with overall limits dropping to maybe 1/4 or even up to 1/10 of what they currently are.

Re: Credit Card Management...So many cards...So many limits

wasCB14 — Thu, 29 Aug 2019 01:26:25 GMT

@Anonymous wrote:
@alexgold9393 wrote:
How do you manage these cards do you actually spend 20-25k/month on all different cards to keep these limits.

I don't understand how banks can give a higher limit to people that are not taking advantage of the limits given to them.
No one that I know of spends $20k-$25k per month on cards. That's like $250k-$300k per year, which of course would take an income greater than that to achieve. Those capable of that fall into under 1% of the population, no doubt.

I think it's very silly that banks extend monster limits to many people (myself included) that barely use even a small percentage of such limit(s).

If banks actually set limits taking spend/usage into strong consideration, you'd see plenty of forum members around here with overall limits dropping to maybe 1/4 or even up to 1/10 of what they currently are.

Expenses can be lumpy for some people. Just because someone doesn't spend $25k every month doesn't mean they won't occasionally spend that much.

Common lumps:

- Home renovations

- Income tax payments for investors and the self-employed

- Property tax payments

- Tuition

- Automobile purchases (perhaps after some negotiation)

Re: Credit Card Management...So many cards...So many limits

Anonymous — Thu, 29 Aug 2019 03:08:57 GMT

@wasCB14 wrote:
Expenses can be lumpy for some people. Just because someone doesn't spend $25k every month doesn't mean they won't occasionally spend that much.

I don't disagree with that, but even with the occasional big spend cycle (which would likely be limited to a card or two, not 10+) when you're talking $30k+ limits it's still pretty silly. The smarter system and the way it should work IMO is that when one of those times comes someone requests a CLI since they actually "need" it. Think about the number of CLIs granted that aren't needed relative to those that actually are. If the not needed ones went away (or were dramatically reduced) it would free up far more dollars for the smaller percentage of those that did actually need them.

Re: Credit Card Management...So many cards...So many limits

wasCB14 — Thu, 29 Aug 2019 03:43:23 GMT

@Anonymous wrote:
@wasCB14 wrote:
Expenses can be lumpy for some people. Just because someone doesn't spend $25k every month doesn't mean they won't occasionally spend that much.

I don't disagree with that, but even with the occasional big spend cycle (which would likely be limited to a card or two, not 10+) when you're talking $30k+ limits it's still pretty silly. The smarter system and the way it should work IMO is that when one of those times comes someone requests a CLI since they actually "need" it. Think about the number of CLIs granted that aren't needed relative to those that actually are. If the not needed ones went away (or were dramatically reduced) it would free up far more dollars for the smaller percentage of those that did actually need them.

True. I have 17 cards, but there are currently only 5 I would put significant spend on: CFU, CSR, BBP, Costco, and BCP during the no-fee Plan It promo.

Keep in mind a lot of people with significant spend/income/assets have:

- NPSL Amex charge cards

- Soft CL Amex revolvers (sometimes very soft)

- "Wealth management" tier cards (with special underwriting and 6+ figure CLs)

Major CLI requests can take time, as there is often income/asset verification or a tax return transcript involved. A CLI isn't always needed, though.

I don't think there is any shortage of capital for low-risk high-spend customers.

Re: Credit Card Management...So many cards...So many limits

FinStar — Thu, 29 Aug 2019 04:30:56 GMT

@wasCB14 wrote:
@Anonymous wrote:
@wasCB14 wrote:
Expenses can be lumpy for some people. Just because someone doesn't spend $25k every month doesn't mean they won't occasionally spend that much.

I don't disagree with that, but even with the occasional big spend cycle (which would likely be limited to a card or two, not 10+) when you're talking $30k+ limits it's still pretty silly. The smarter system and the way it should work IMO is that when one of those times comes someone requests a CLI since they actually "need" it. Think about the number of CLIs granted that aren't needed relative to those that actually are. If the not needed ones went away (or were dramatically reduced) it would free up far more dollars for the smaller percentage of those that did actually need them.
True. I have 17 cards, but there are currently only 5 I would put significant spend on: CFU, CSR, BBP, Costco, and BCP during the no-fee Plan It promo.

Keep in mind a lot of people with significant spend/income/assets have:
- NPSL Amex charge cards
- Soft CL Amex revolvers (sometimes very soft)
- "Wealth management" tier cards (with special underwriting and 6+ figure CLs)

Major CLI requests can take time, as there is often income/asset verification or a tax return transcript involved. A CLI isn't always needed, though.

I don't think there is any shortage of capital for low-risk high-spend customers.

Pretty much the highlighted items IME. It's not unusual for a variety of some monthly expenditures to be upwards of $25K (or higher) in many instances where having such higher CLs (>$50K) provide the extra flexibility in addition to advantageous rewards. And, I'm certainly not an exception nor outlier since there are plenty of individuals who have significant spend patterns as well.

Re: Credit Card Management...So many cards...So many limits

Aim_High — Thu, 29 Aug 2019 19:23:32 GMT

@Anonymous wrote: I think it's very silly that banks extend monster limits to many people (myself included) that barely use even a small percentage of such limit(s).

I agree that it's silly but I'm glad they do since FICO penalizes us for using more than a tiny fraction of our credit lines. To keep from lowering your scores, utilization needs to stay under 10%. That's ridiculous. So to me, it's only right that they give monster credit lines to offset the detrimental affect on our scores for using the credit we are granted. On the other hand, if they want to change the system where we can actually use our credit with no negative impact, I'm fine with 10% of my credit lines. I'll use much less than that at one time anyway.

Re: Credit Card Management...So many cards...So many limits

Aim_High — Thu, 29 Aug 2019 19:30:34 GMT

@wasCB14 wrote:
Expenses can be lumpy for some people. Just because someone doesn't spend $25k every month doesn't mean they won't occasionally spend that much.

Common lumps:
- Home renovations
- Income tax payments for investors and the self-employed
- Property tax payments
- Tuition
- Automobile purchases (perhaps after some negotiation)

+1 ^ ^ ^

And I would add to that potential "big ticket" list even more ...

- Vacations

- Holiday

- Weddings

- Medical expenses

- Moving expenses

- Redecorating a new home expenses

And it could be a combination of the above, plus maybe higher than routine expenses for car repairs, home repairs, holiday gift-buying, and other smaller than $25K but larger than routine expenses.