topic Closing accounts to get an increase? in General Credit Topics

Closing accounts to get an increase?

Anonymous — Mon, 20 Jul 2015 20:23:40 GMT

This is basically a question from my wife who tried to get an increase with our local credit union but was told she needs to close 2 of her cards in order for them to increase that particular line of credit. The two accounts in question are;

Walmart, opened in late 09 with then GE Money now Synchrony, with a limit of $1,300 that hasn't been used since last March

Barclay , opened in early 2012 with a of $2,900 that hasn't been used since last march.

The underwriter for our local credit union said that those need to be closed in order for her to get a $4000 increase on a card that currently has $1000 limit.

Is she right? Thanks for the help guys.

Re: Closing accounts to get an increase?

Anonymous — Mon, 20 Jul 2015 20:28:21 GMT

It sounds like the underwriter believes that her profile doesn't support her current credit exposure. How do the rewards on this CU card compare to the rewards on the other two? If it isn't beneficial to do this, she should forgo the increase.

Re: Closing accounts to get an increase?

Anonymous — Mon, 20 Jul 2015 20:53:04 GMT

@Anonymous wrote:
It sounds like the underwriter believes that her profile doesn't support her current credit exposure. How do the rewards on this CU card compare to the rewards on the other two? If it isn't beneficial to do this, she should forgo the increase.

Well she is currently getting an APR of 12%. The underwriter told her she does not qualify for the increase but instead upgraded her to another card with the same limit but lower APR at 9%. My wife really cares about APR, hence the fact that Barclay, Walmart and other cards with high APR's haven't been used in a while. She actually has as many cards as you, but the underwriter seems to think she's got too many. We don't get it.

Re: Closing accounts to get an increase?

Revelate — Mon, 20 Jul 2015 23:14:15 GMT

@Anonymous wrote:
@Anonymous wrote:
It sounds like the underwriter believes that her profile doesn't support her current credit exposure. How do the rewards on this CU card compare to the rewards on the other two? If it isn't beneficial to do this, she should forgo the increase.
Well she is currently getting an APR of 12%. The underwriter told her she does not qualify for the increase but instead upgraded her to another card with the same limit but lower APR at 9%. My wife really cares about APR, hence the fact that Barclay, Walmart and other cards with high APR's haven't been used in a while. She actually has as many cards as you, but the underwriter seems to think she's got too many. We don't get it.

Every lender will have different guidelines for what they feel is acceptable; from a scoring perspective I wouldn't be closing two good tradelines to increase limit on a third personally... wouldn't have even done that on a mortgage application FWIW but that's me.

Re: Closing accounts to get an increase?

pizza1 — Tue, 21 Jul 2015 02:02:32 GMT

me personally...I would not close 2 long standing lines just to get a $3k cli...that would a joke! Now...If they wanted to increase it to $10k...I would consider it, but not for $3k.

Your wife may really like that apr on the card....but if what she's wanting is a bigger limit...apply for a card known to give high SL, like Venture!

Re: Closing accounts to get an increase?

Anonymous — Tue, 21 Jul 2015 02:40:23 GMT

@pizza1 wrote:
me personally...I would not close 2 long standing lines just to get a $3k cli...that would a joke! Now...If they wanted to increase it to $10k...I would consider it, but not for $3k.

Your wife may really like that apr on the card....but if what she's wanting is a bigger limit...apply for a card known to give high SL, like Venture!

Pardon the igonorance but what aexactly does "SL" satnd for, Secure Loan?

Does the fact that the card she is looking to get an increase with is her oldest? Walmart and Barclay are kind of newer, will that matter? She really doesn't want them anymore, they both have high apr.

Re: Closing accounts to get an increase?

Revelate — Tue, 21 Jul 2015 03:00:21 GMT

@Anonymous wrote:
@pizza1 wrote:
me personally...I would not close 2 long standing lines just to get a $3k cli...that would a joke! Now...If they wanted to increase it to $10k...I would consider it, but not for $3k.

Your wife may really like that apr on the card....but if what she's wanting is a bigger limit...apply for a card known to give high SL, like Venture!
Pardon the igonorance but what aexactly does "SL" satnd for, Secure Loan?
Does the fact that the card she is looking to get an increase with is her oldest? Walmart and Barclay are kind of newer, will that matter? She really doesn't want them anymore, they both have high apr.

Starting Limit in this case... though yeah I usually would've used it for Student Loans .

Re: Closing accounts to get an increase?

Erusidhion — Tue, 21 Jul 2015 06:04:07 GMT

Get on her Walmart card, ask for a CLI through online chat accessed from online account. Ask for $25,000 or a lower number like $3,000 if you want. Does she know you can get 0% apr on any purchases at the Walmart stores (hell you can put groceries on 0%, it's bizarre!). Here's a link to the 0% apr stuff, just print this out and take it to the store and scan after everything is rung up:

Walmart 0% APR Offer also you can get cash back up to $100 per 24 hour period and it counts as a purchase and NOT cash advance. Speaking of which, I've yet to see if taking out the $100 cash would be covered under the 0% apr terms.... hmm. May have to test that!

Also, have you tried for a CLI with Barclay? It seems you're giving up two cards for one which is actually going backwards. If she cares about APR have her call Barclay and ask for APR reduction + a CLI with her current card.

Or she could apply for the Barclay Ring which is exactly what she wants:

Barclaycard Ring Mastercard Information

You SHOULD be able to get a CLI on your Walmart AND your Barclay, I'd apply for the Ring anyways if I were her. Good luck in your decision!

Re: Closing accounts to get an increase?

takeshi74 — Tue, 21 Jul 2015 13:30:50 GMT

@Anonymous wrote:

Is she right?

We're not underwriters for that credit union so we cannot verify or refute her claim. A given creditor can certainly have a certain point where it is willing to extend credit and will not grant credit beyond that point. It is certainly possible that your wife is above the mark for that credit union and for your wife's credit profile. A different creditor may have a different amount that it would be confortable with. If your wife's credit profile was stronger then that could also affect the amount that a given credit would be willing to extend.

@Anonymous wrote:
She actually has as many cards as you, but the underwriter seems to think she's got too many. We don't get it.

Number of cards isn't the issue. Exposure is. Also, keep in mind that everyone's credit is not identical. You cannot assume that because someone else has X cards and $Y total credit that your wife's credit and income qualify for the same.

@Anonymous wrote:
Does the fact that the card she is looking to get an increase with is her oldest? Walmart and Barclay are kind of newer, will that matter?

Not really -- aside from the impact to AAoA. Age of the card isn't directly linked to the limit. Limits are granted based on what one's credit and income qualify for versus the creditor's underwriting criteria.

Re: Closing accounts to get an increase?

Anonymous — Tue, 21 Jul 2015 16:30:23 GMT

@Erusidhion wrote:

Get on her Walmart card, ask for a CLI through online chat accessed from online account. Ask for $25,000 or a lower number like $3,000 if you want. Does she know you can get 0% apr on any purchases at the Walmart stores (hell you can put groceries on 0%, it's bizarre!). Here's a link to the 0% apr stuff, just print this out and take it to the store and scan after everything is rung up:

Walmart 0% APR Offer also you can get cash back up to $100 per 24 hour period and it counts as a purchase and NOT cash advance. Speaking of which, I've yet to see if taking out the $100 cash would be covered under the 0% apr terms.... hmm. May have to test that!

Also, have you tried for a CLI with Barclay? It seems you're giving up two cards for one which is actually going backwards. If she cares about APR have her call Barclay and ask for APR reduction + a CLI with her current card.

Or she could apply for the Barclay Ring which is exactly what she wants:

Barclaycard Ring Mastercard Information

You SHOULD be able to get a CLI on your Walmart AND your Barclay, I'd apply for the Ring anyways if I were her. Good luck in your decision!

She actually asked Walmart, BArclay and Capital One for better APR, it was done the same month we payed off the cards which were nearly maxed out. They declined even tho 3 months later her FICO score rose to 800. She then helped me get with Discover by becoming my co-signer in late April, not even a week had passed when we receive news that Capital One had increased her credit limit from $1,800 to $3,800. Discover offered us 0%APR for 12 months so we move some balances over.

What's the opinion here of the Barclay Ring card?

Re: Closing accounts to get an increase?

Anonymous — Tue, 21 Jul 2015 16:51:57 GMT

Well we found more info on why did the CU's undewriter came to such decision yesterday. According to her my wife's the overall utilization is at 34% and that is why she couln't increase her credit limit.

I'm guessing calling Barclay and asking to be moved to the Barclay Ring will result in a denial at this poin, right?

Re: Closing accounts to get an increase?

Anonymous — Wed, 22 Jul 2015 04:37:35 GMT

@takeshi74 wrote:
@Anonymous wrote:

Is she right?
We're not underwriters for that credit union so we cannot verify or refute her claim.

Sorry. What I'm asking is if it is normal for an underwriter to ask someone to close lines of credit in order to just increase the limit on the loan or card.

Re: Closing accounts to get an increase?

Anonymous — Wed, 22 Jul 2015 05:21:31 GMT

I have heard about underwriters refusing to grant extra credit to people that they feel are risky in some way. We're not professional underwriters and we don't know all the details of your wife's profile and what that U's policies might be, so that's why it's hard to say much more.

One thing that jumps out at me, which I am not sure anyone has mentioned yet is your comment that "My wife really cares about APR." People who care a lot about APR are people who often carry a balance, i.e. who do not pay in full. Some banks and CU's (not all) find the act of often carrying a balance to be worrisome and a red flag, since such people statistically pose far higher risk than those who usually pay in full.

For a number of reasons it might be worth considering not directing your energy in the area of more or different credit cards or bigger limits -- but instead putting in the opposite direction. I.e. instead of finding ways to go further into debt, it might be worth trying to pay off all your existing CC debt and then continue to pay all CCs in full while keeping total utilization at under 5%. See what that's like for a year or two. It might cause your CU to alter their perception of her risk, and might also alter your own credit style in a way you end up deciding you like. That's just a thought, totally don't have to go with it. Best of luck regardless...

Re: Closing accounts to get an increase?

Anonymous — Wed, 22 Jul 2015 05:29:53 GMT

@Anonymous wrote:
I have heard about underwriters refusing to grant extra credit to people that they feel are risky in some way. We're not professional underwriters and we don't know all the details of your wife's profile and what that U's policies might be, so that's why it's hard to say much more.

One thing that jumps out at me, which I am not sure anyone has mentioned yet is your comment that "My wife really cares about APR." People who care a lot about APR are people who often carry a balance, i.e. who do not pay in full. Some banks and CU's (not all) find the act of often carrying a balance to be worrisome and a red flag, since such people statistically pose far higher risk than those who usually pay in full.

For a number of reasons it might be worth considering not directing your energy in the area of more or different credit cards or bigger limits -- but instead putting in the opposite direction. I.e. instead of finding ways to go further into debt, it might be worth trying to pay off all your existing CC debt and then continue to pay all CCs in full while keeping total utilization at under 5%. See what that's like for a year or two. It might cause your CU to alter their perception of her risk, and might also alter your own credit style in a way you end up deciding you like. That's just a thought, totally don't have to go with it. Best of luck regardless...

You are absolutely right, she does like carrying a balance, I personally despise that. I appreciate you honesty. She is currently trying ot paid that balance along with the one she has in capital one.

Re: Closing accounts to get an increase?

Anonymous — Wed, 22 Jul 2015 05:33:52 GMT

Get her balances paid down to under 9% of her credit limit. Then apply for the Barclay Ring card. Make that her primary spending card after she gets it.

Re: Closing accounts to get an increase?

Anonymous — Wed, 22 Jul 2015 05:39:32 GMT

@Anonymous wrote:
Get her balances paid down to under 9% of her credit limit. Then apply for the Barclay Ring card. Make that her primary spending card after she gets it.

She is currently using her CU's credit card as primary spending card, hence the fact she wanted to increase her limit, not to use it but just to have it for emergencies with such low APR.

Re: Closing accounts to get an increase?

Anonymous — Wed, 22 Jul 2015 05:48:13 GMT

Good for you, Buddy. (Actually, I was going to say Good for you, buddy with a small b -- and then I saw that your name IS Buddy. :-) )

Three cheers to your wife, too. It's hard changing how you spend money, so congrats to her for trying something new.

Note that even when you really need to spend a lot one month, you can still do it in a way that keeps your reported utilization very low even if your credit limits are not high. It just means going in a couple times during the month and paying the card down.

The real trick in life (I am discovering) is keeping all kinds of spending down period, regardless of what tricks you play with your credit. In one of his books on investing, William J. Bernstein observes that working class guys are often able to retire earlier than doctors and lawyers and CEOs, because the latter's high salaries are eaten up by self-inflicted needs to spend money (expensive cars, vacations, houses, clothes, etc.).

Re: Closing accounts to get an increase?

Anonymous — Mon, 27 Jul 2015 01:04:24 GMT

Just wanted to agree she should go on walmart chat and ask for a huge credit limit increase, as they will counter. I have scores in the 650s and they just recently gave me an increase from 1150-4000! I asked for 5000 and they countered. And ive only had the card for one year.

There's nothing to lose, its a soft pull. But it has to be chat (green button available m-f business hours or so), not the luv button (request a credit increase). With her scores, i cant imagine they'd say no. And i dont think ive ever heard of walmart doing an apr reduction. But if she gets a huge credit increase, itll help her utilization, thus helping her get that cu card!

Re: Closing accounts to get an increase?

Anonymous — Mon, 27 Jul 2015 03:49:46 GMT

@Anonymous wrote:
Just wanted to agree she should go on walmart chat and ask for a huge credit limit increase, as they will counter. I have scores in the 650s and they just recently gave me an increase from 1150-4000! I asked for 5000 and they countered. And ive only had the card for one year.

There's nothing to lose, its a soft pull. But it has to be chat (green button available m-f business hours or so), not the luv button (request a credit increase). With her scores, i cant imagine they'd say no. And i dont think ive ever heard of walmart doing an apr reduction. But if she gets a huge credit increase, itll help her utilization, thus helping her get that cu card!

Will the "green button" be located at walmart.com/credit or does she have to sign in?

Thanks.

Re: Closing accounts to get an increase?

Anonymous — Tue, 28 Jul 2015 01:22:31 GMT

It may be worth keeping a couple things in mind. First, if I read your early posts right, she doesn't like the Walmart card. Second, Walmart cards appear to be classified by FICO as "low quality" cards and having one can actually do some harm to one's score. (Obviously there are exceptions: if a Walmart card is your only account, or the only account that you have an unbroken long record of positive data, then it is helping you out much more than not.)

So your wife may want to rethink trying to find ways to extend a card that she doesn't like and which might be on the whole costing her some points.

If you want to explore the question of the extent to which certain kinds of accounts are looked at as actual liabilities by FICO, do a search for WALMART CONSUMER FINANCE -- you should see a number of posts.

I appreciate your willingness to hear me out earlier. In general, I'll probably be the guy repeatedly giving the BO-ring unsexy advice which is to resolutely resist the urge to secure more extravagant capacity to be in debt, but rather instead to focus on keeping spending and debt low. It's an ironic thing, I realize, but the only people for whom lots of cards and/or bigger and bigger credit limits are a good thing are people who never carry a balance and are spending far less than they make (i.e. are putting at least 20% of their take home pay into savings). Unless a person is doing that, the best solution to their credit issues is not credit expansion but spending reduction. That's only one man's opinion, but it's what I think.