topic Re: Do larger limit cards hurt future large limit Approvals? in Credit Cards

Do larger limit cards hurt future large limit Approvals?

MountainHiker — Sun, 03 Mar 2013 16:45:45 GMT

I wonder if having cards with $5K + hurt your chances of getting other cards with large limits or could it work just the opposite?

Re: Do larger limit cards hurt future large limit Approvals?

j_casteel — Sun, 03 Mar 2013 16:49:10 GMT

most of the time big limits allow for future big limits

Re: Do larger limit cards hurt future large limit Approvals?

LS2982 — Sun, 03 Mar 2013 16:53:21 GMT

No, its just the opposite if your file is clean. Creditors will compete for your business especially if they are prime banks.

Re: Do larger limit cards hurt future large limit Approvals?

Revelate — Sun, 03 Mar 2013 17:00:20 GMT

@MountainHiker wrote:
I wonder if having cards with $5K + hurt your chances of getting other cards with large limits or could it work just the opposite?

Depends on the lender; however, I would submit that 5K is well too low of a margin: namely, 5K lines are nearly always beneficial for future approvals.

Where it goes a little sideways is for the long-established folks with multiple 25K+ tradelines without a commeasurate spend or income. We've seen a few folks who have received the "You have enough credit limits available already" type response, but generally that's a low percentage of the population.

I'm certainly trying nearly every trick in the stupid book beyond outright buying a 5K+ limit on a secured card, and I may go that route too in the future if it's required for me to break that ceiling.

Re: Do larger limit cards hurt future large limit Approvals?

webhopper — Sun, 03 Mar 2013 17:02:05 GMT

@Revelate wrote:
@MountainHiker wrote:
I wonder if having cards with $5K + hurt your chances of getting other cards with large limits or could it work just the opposite?
Depends on the lender; however, I would submit that 5K is well too low of a margin: namely, 5K lines are nearly always beneficial for future approvals.

Where it goes a little sideways is for the long-established folks with multiple 25K+ tradelines without a commeasurate spend or income. We've seen a few folks who have received the "You have enough credit limits available already" type response, but generally that's a low percentage of the population.

I'm certainly trying nearly every trick in the stupid book beyond outright buying a 5K+ limit on a secured card, and I may go that route too in the future if it's required for me to break that ceiling.

I think you start running into issues around the 10-15k mark... your limits have to match your actual income... higher income begets higher limits when you're looking at 20k+ CLs

Re: Do larger limit cards hurt future large limit Approvals?

dddewdrop — Sun, 03 Mar 2013 17:07:25 GMT

It seems to me that it would work in your favor but only up to a certain point. It also depends a lot on your income. For example if you make 50k a year and have 100k in available credit, if you were to start having big balances, banks would be reluctant to give you more big credit lines cause you don't make enough to be able to pay it back. As long as your util is low it works to a certain point. Eventually, you will be limited by your income I believe however.

Re: Do larger limit cards hurt future large limit Approvals?

lg8302ch — Sun, 03 Mar 2013 17:11:44 GMT

@LS2982 wrote:
No, its just the opposite if your file is clean. Creditors will compete for your business especially if they are prime banks.

This is an interesting statement. I am curious to see if Discover will ever auto CLI and match my other cards CL?

Re: Do larger limit cards hurt future large limit Approvals?

londonhogfan — Sun, 03 Mar 2013 17:21:13 GMT

@LS2982 wrote:
No, its just the opposite if your file is clean. Creditors will compete for your business especially if they are prime banks.

This is true. I didnt have anything over 2,000, but as soon as walmart upped mine to 10,000 everyone else followed.

Re: Do larger limit cards hurt future large limit Approvals?

Revelate — Sun, 03 Mar 2013 17:25:38 GMT

@webhopper wrote:
@Revelate wrote:
@MountainHiker wrote:
I wonder if having cards with $5K + hurt your chances of getting other cards with large limits or could it work just the opposite?
Depends on the lender; however, I would submit that 5K is well too low of a margin: namely, 5K lines are nearly always beneficial for future approvals.

Where it goes a little sideways is for the long-established folks with multiple 25K+ tradelines without a commeasurate spend or income. We've seen a few folks who have received the "You have enough credit limits available already" type response, but generally that's a low percentage of the population.

I'm certainly trying nearly every trick in the stupid book beyond outright buying a 5K+ limit on a secured card, and I may go that route too in the future if it's required for me to break that ceiling.

I think you start running into issues around the 10-15k mark... your limits have to match your actual income... higher income begets higher limits when you're looking at 20k+ CLs

To a certain amount spend factors too; there's the grey area of reimburseable business expenses which don't necessiate requiring a business card which can substantially boost one's spend outside of one's income.

As an example speaking only marginally hypothetically: we use the Amex Travel service where I primarily work, but the first thing I had to do was submit my profile and on that was a personal credit card for airline / hotel / car reservations... and the amount of travel I'd have to do to qualify for a corporate card is really high. In 2014 where I may be setting up datacenters all over the lower 48 in addition to likely going to some of our live events, wouldn't qualify me for one even, and that's probably an additional 30K of reimbursable expenses run through my personal credit cards.

This is another method for driving up CL's; however, it's probably a small percentage of folks. Also those who do carry business cards, sometimes those report to personal credit as well. AFAIK I think these are some of the things benefitting you personally Webby?

I don't know the Card Act language specifically, but I think the expectation is that the lenders will be paid back, and that doesn't have to be straight taxable income in order to do so even if for most people that's what's used?

Re: Do larger limit cards hurt future large limit Approvals?

Revelate — Sun, 03 Mar 2013 17:27:40 GMT

@londonhogfan wrote:
@LS2982 wrote:
No, its just the opposite if your file is clean. Creditors will compete for your business especially if they are prime banks.
This is true. I didnt have anything over 2,000, but as soon as walmart upped mine to 10,000 everyone else followed.

I would submit it's too small of a statistical sampling, and anecdotally there certainly seems to be an upper bound on that... much as I'm hoping that my own Wally card will do similar wonders for my own credit profile .

Re: Do larger limit cards hurt future large limit Approvals?

thom02099 — Sun, 03 Mar 2013 17:33:16 GMT

@MountainHiker wrote:
I wonder if having cards with $5K + hurt your chances of getting other cards with large limits or could it work just the opposite?

If you have the income, scores, and util to support it, larger limits beget larger limits. As others have said, the prime banks will compete for your business, but only up to a point. There IS a point of diminishing returns, one has to be aware of not being overly greedy and asking for limit inceases as a simple sporting event. At some point, it's good to say "I'm satisfied where I am", and not do anything more than just grow what one has. If there's automatic CLI in the future, so much the better.

Re: Do larger limit cards hurt future large limit Approvals?

webhopper — Sun, 03 Mar 2013 17:40:43 GMT

@Revelate wrote:
@webhopper wrote:
@Revelate wrote:
@MountainHiker wrote:
I wonder if having cards with $5K + hurt your chances of getting other cards with large limits or could it work just the opposite?
Depends on the lender; however, I would submit that 5K is well too low of a margin: namely, 5K lines are nearly always beneficial for future approvals.

Where it goes a little sideways is for the long-established folks with multiple 25K+ tradelines without a commeasurate spend or income. We've seen a few folks who have received the "You have enough credit limits available already" type response, but generally that's a low percentage of the population.

I'm certainly trying nearly every trick in the stupid book beyond outright buying a 5K+ limit on a secured card, and I may go that route too in the future if it's required for me to break that ceiling.

I think you start running into issues around the 10-15k mark... your limits have to match your actual income... higher income begets higher limits when you're looking at 20k+ CLs
To a certain amount spend factors too; there's the grey area of reimburseable business expenses which don't necessiate requiring a business card which can substantially boost one's spend outside of one's income.

As an example speaking only marginally hypothetically: we use the Amex Travel service where I primarily work, but the first thing I had to do was submit my profile and on that was a personal credit card for airline / hotel / car reservations... and the amount of travel I'd have to do to qualify for a corporate card is really high. In 2014 where I may be setting up datacenters all over the lower 48 in addition to likely going to some of our live events, wouldn't qualify me for one even, and that's probably an additional 30K of reimbursable expenses run through my personal credit cards.

This is another method for driving up CL's; however, it's probably a small percentage of folks. Also those who do carry business cards, sometimes those report to personal credit as well. AFAIK I think these are some of the things benefitting you personally Webby?

I don't know the Card Act language specifically, but I think the expectation is that the lenders will be paid back, and that doesn't have to be straight taxable income in order to do so even if for most people that's what's used?

Reimbursable work expenses drive up my spending by about 10 - 15k per year and it always gets paid off pretty fast, because I get reimbused on the Thursday after the work trip is complete. I do about 4 work trips per year and I also pay for work stuff on my personal cards and do reimbursements on some vendors because its easier than setting them up in our accounting system if I'm only going to use them once. Also, our accounts payable takes 45 days to pay out, so on payments to the Department of Labor or the State, I go ahead and pay with Credit card and get reimbursed because if they dont get paid on time, they will threaten to come and lock our our equipment at work. This only happened once (the threat, not the lockout) but if they ever did it, it would be a DISASTER for my employer and I would be responsible.

Also helps that my husband has his own income which is not used as a basis for determining limits, but his income definately goes into the pot as far as paying for our expenses. Last year he made 60k, and had no debt to his name (his scores are lower so if we put something in his name, the interest rate would be high)

This year he stopped working to become a full time student and his income decreased to about 20k per year, so our spending has decreased from about 3k per month, down to about 1500 per month since he's home and he cooks meals and we asked our housekeeper to only come once per month instead of every week.

I have a business Amex which does not report to personal and there is no way that I'd ever use 10% of that limit, as the business income is too small to really justify a lot of business spending... Our business spend is usually at Lowes or other hardware stores / home improvement vendors. Recently I bought 10 new office chairs for the conference room at work using my business card, and I don't think my plant manager minds me doing reimbursment for those types of things. Also, my graduate school tuition is reimbursed by my employer, up to 5k per year, so that's another source of spend that I wouldn't normally have

If I had a different job or a different employer, my spend would be MUCH less.

Re: Do larger limit cards hurt future large limit Approvals?

twall06 — Sun, 03 Mar 2013 17:55:51 GMT

My company requires us to use a corporate Amex for flights, hotels , and rental cars . I dont travel that much so i wouldnt really earn any points off it any ways. Usually just two business trips a year

Re: Do larger limit cards hurt future large limit Approvals?

Anonymous — Sun, 03 Mar 2013 18:23:00 GMT

@thom02099 wrote:
@MountainHiker wrote:
I wonder if having cards with $5K + hurt your chances of getting other cards with large limits or could it work just the opposite?
If you have the income, scores, and util to support it, larger limits beget larger limits. As others have said, the prime banks will compete for your business, but only up to a point. There IS a point of diminishing returns, one has to be aware of not being overly greedy and asking for limit inceases as a simple sporting event. At some point, it's good to say "I'm satisfied where I am", and not do anything more than just grow what one has. If there's automatic CLI in the future, so much the better.

Yes to this and thank you for the thoughtful post. My income this year does not support multiple 10k+ credit lines across my GECRB cards so I am not requesting them even though my odds for approval are fairly high. Long term thinking tells me that I am better off working on getting my prime CCs limits raised by using them and PIF.

Re: Do larger limit cards hurt future large limit Approvals?

thom02099 — Sun, 03 Mar 2013 21:00:32 GMT

@Anonymous wrote:
@thom02099 wrote:
@MountainHiker wrote:
I wonder if having cards with $5K + hurt your chances of getting other cards with large limits or could it work just the opposite?
If you have the income, scores, and util to support it, larger limits beget larger limits. As others have said, the prime banks will compete for your business, but only up to a point. There IS a point of diminishing returns, one has to be aware of not being overly greedy and asking for limit inceases as a simple sporting event. At some point, it's good to say "I'm satisfied where I am", and not do anything more than just grow what one has. If there's automatic CLI in the future, so much the better.
Yes to this and thank you for the thoughtful post. My income this year does not support multiple 10k+ credit lines across my GECRB cards so I am not requesting them even though my odds for approval are fairly high. Long term thinking tells me that I am better off working on getting my prime CCs limits raised by using them and PIF.

THAT...my friend...is what will make you a success in your credit world! You have a goal in mind and a now a plan!

ONWARD AND UPWARD !

Re: Do larger limit cards hurt future large limit Approvals?

MountainHiker — Sun, 03 Mar 2013 21:26:45 GMT

Opening up this thread was a good idea.Some really good feedback from all of you.

BlueNightStar

I agree with you 1000%.Growing a few very good cards is probably the better way to improve a credit file.And that method also makes other creditors want to seek out that customer. I want about 5 cards in total and use them to my maximum benefit.

Re: Do larger limit cards hurt future large limit Approvals?

Anonymous — Sun, 03 Mar 2013 22:17:27 GMT

I wouldn't be too concerned with future approvals. It's when you start obtaining cards in the 25k+ range you may need to be careful. Even then, it just depends on if your income can support those limits.

Re: Do larger limit cards hurt future large limit Approvals?

youngandcreditwrthy — Mon, 04 Mar 2013 19:53:05 GMT

I think I'm to the point that I have enough avail cred, but I will concur that without my higher lines $5-10k range, I don't think Amex would have approved my 3xcl. I genuinely feel as though creditors do not want you to have more than your annual income in credit lines as I've been denied clis on my $20k Paypal MC and $15k Wmt Discover recently, and I'm right about at my hhi in credit lines.
So I hope that Amex will allow me a 3xcli in a few more months.
Otoh, if denied a cli for too much existing avail cred, you could offer up some line cutting to get the line you want with the bank you want!:-)

Re: Do larger limit cards hurt future large limit Approvals?

Anonymous — Mon, 04 Mar 2013 21:16:13 GMT

@youngandcreditwrthy wrote:
I think I'm to the point that I have enough avail cred, but I will concur that without my higher lines $5-10k range, I don't think Amex would have approved my 3xcl. I genuinely feel as though creditors do not want you to have more than your annual income in credit lines as I've been denied clis on my $20k Paypal MC and $15k Wmt Discover recently, and I'm right about at my hhi in credit lines.
So I hope that Amex will allow me a 3xcli in a few more months.
Otoh, if denied a cli for too much existing avail cred, you could offer up some line cutting to get the line you want with the bank you want!:-)

Depends on the creditors as well as other factors.

I currently have $53.3k in credit lines vs. $43.5k in income.

And those limits were achieved with even lower reported income (I have received a raise since the time I hit $53.3k)

Re: Do larger limit cards hurt future large limit Approvals?

p- — Mon, 04 Mar 2013 21:29:54 GMT

Revelate wrote:...I'm certainly trying nearly every trick in the stupid book beyond outright buying a 5K+ limit on a secured card, and I may go that route too in the future if it's required for me to break that ceiling...

USAA was the first company to break 5k for me. They originally gave me a 3k line and then raised it with a hard pull on my request at 6 months.

Chase and Cap1 gave me 10k, and that looks like the ceiling I have to break now. I tried to raise USAA again at 18 months and they told me no.

Are you a penfed member yet? I've heard stories of high limits from them. I got a car loan through them, but decided not to get a card because I have so many already.