topic Re: What does everyone do with all this credit? in General Credit Topics

What does everyone do with all this credit?

jl4 — Mon, 12 Mar 2018 17:46:22 GMT

I'm new to the > $20k club, myself. That's a question I haven't been able to figure out an answer for.

I see folks with tens or hundreds of thousands in revolving credit. What do y'all do with it? How do you manage it all? I love the idea of having substantial revolving credit but having two (maybe three) cards, all with 3-month spending bonuses feels like it'll be tough to manage coming from having zero cards ever that had such a perk.

Or is it really just a game that I haven't figured out how to play and win, yet...

Re: What does everyone do with all this credit?

Adkins — Mon, 12 Mar 2018 17:52:55 GMT

Some people need those high limits because they put a lot of spend through their cards, so it helps keep utilization under control. Others just like knowing they have the credit limits if they need them. Still for others, it's a game - who's got the highest limits (and most cards) of them all is the winner. People use spreadsheets, pen & paper and/or apps to track their cards. And not every card is necessarily used every month, too. It's not so much a game as you need to sit down and decide exactly what your credit card goals are, and go from there. Everyone here has different credit needs, profiles and credit wants. It's up to you to figure out where you are going to stand.

Re: What does everyone do with all this credit?

Broke_Triathlete — Mon, 12 Mar 2018 17:53:21 GMT

@jl4wrote:
I'm new to the > $20k club, myself. That's a question I haven't been able to figure out an answer for.

I see folks with tens or hundreds of thousands in revolving credit. What do y'all do with it? How do you manage it all? I love the idea of having substantial revolving credit but having two (maybe three) cards, all with 3-month spending bonuses feels like it'll be tough to manage coming from having zero cards ever that had such a perk.

Or is it really just a game that I haven't figured out how to play and win, yet...

I know exactly what you mean. I just recently hit the $100K club myself and it's not as exciting as I thought it would be when I first started rebuilding. I don't even run close to 5% of my available credit limit. Most will tell you it's for utilization padding. Very few actually utilize all of their available credit (tens of hundreds of thousands) and pay back each month.

Re: What does everyone do with all this credit?

Anonymous — Mon, 12 Mar 2018 17:54:08 GMT

The goal is to build up a million dollar available credit so you can go out on a bang in your 80's.

Re: What does everyone do with all this credit?

Anonymous — Mon, 12 Mar 2018 17:59:38 GMT

That is a deeply profound question that goes to the heart of this alternate world that exists here in these forums for some people. Chances are when you have these kinds of credit lines, constantly seeking to raise them with strategies, you are sitting on a ticking time bomb. 'Oh but I pay them all off each month, and I have low utilization'. Well kookookachoo Miss Robinson. You and I know that for the vast overwhelming majority of Americans, they are spending on their credit lines to ridiculous levels. Credit cards are FINANCIAL SUICIDE to anybody who runs balances and pays interest. They have outrageous interest rates, even the 'good' ones compared to any other debt instrument. So the short answer to your question is: whatever you do, dont use it. You want to sit there and have it look pretty for you like the apologists on here who are 'maximizing rewards' and 'PIF' then fine. But chances are thats not going to be you

Re: What does everyone do with all this credit?

Anonymous — Mon, 12 Mar 2018 18:02:59 GMT

At one point I was racing to the $100k limit to help my UTL. Now, all my cards are at $0 balance, so the available credit just sits there. As above said, it is nice to know you have the credit available should you ever need it. With that said, always better to have an emergency savings accounts to use vs a credit card. Some banks will not give you as much credit at you might want because they can see you have too much credit already. I went from over $150k to $120k in credit. I just don't need it anymore. It does look good on your CR profile when you have a lot of credit and you manage it well.

Re: What does everyone do with all this credit?

LionLaw — Mon, 12 Mar 2018 18:08:50 GMT

Up to a certain point, having higher limits may help you get approved more easily for better credit products. For example, there are some excellent rewards cards out there with $5,000 or even $10,000 minimum starting limits, and you may have trouble getting approved for them if you don't already have experience handling high credit limits.

Beyond that, I don't see any inherent benefit to having lots of high credit limits. I'm at about $100,000 myself at this point, and I don't really have any intention of doing anything with it. I suppose it could help keep my scores high if I ever need to carry a balance.

Re: What does everyone do with all this credit?

Anonymous — Mon, 12 Mar 2018 18:08:52 GMT

I don't even know what all my limits are combined. I blame this site for that. Anyway, it all started with a visit here, and wanting to rebuild my credit. Or actually, just take better control/increase my scores. Right now, sitting at a lovely EQ 757, TU 755, and EXP 794. Need to update my sig.

Re: What does everyone do with all this credit?

K-in-Boston — Mon, 12 Mar 2018 18:24:59 GMT

Count me in the “I need it for utilization” category. I use a spreadsheet and I enjoy free vacations.

Re: What does everyone do with all this credit?

Remedios — Mon, 12 Mar 2018 18:29:32 GMT

@Anonymouswrote:
That is a deeply profound question that goes to the heart of this alternate world that exists here in these forums for some people. Chances are when you have these kinds of credit lines, constantly seeking to raise them with strategies, you are sitting on a ticking time bomb. 'Oh but I pay them all off each month, and I have low utilization'. Well kookookachoo Miss Robinson. You and I know that for the vast overwhelming majority of Americans, they are spending on their credit lines to ridiculous levels. Credit cards are FINANCIAL SUICIDE to anybody who runs balances and pays interest. They have outrageous interest rates, even the 'good' ones compared to any other debt instrument. So the short answer to your question is: whatever you do, dont use it. You want to sit there and have it look pretty for you like the apologists on here who are 'maximizing rewards' and 'PIF' then fine. But chances are thats not going to be you

I'm gonna have to deploy words no man wants to hear...You're doing it wrong

Re: What does everyone do with all this credit?

Anonymous — Mon, 12 Mar 2018 18:34:59 GMT

@Remedioswrote:
@Anonymouswrote:
That is a deeply profound question that goes to the heart of this alternate world that exists here in these forums for some people. Chances are when you have these kinds of credit lines, constantly seeking to raise them with strategies, you are sitting on a ticking time bomb. 'Oh but I pay them all off each month, and I have low utilization'. Well kookookachoo Miss Robinson. You and I know that for the vast overwhelming majority of Americans, they are spending on their credit lines to ridiculous levels. Credit cards are FINANCIAL SUICIDE to anybody who runs balances and pays interest. They have outrageous interest rates, even the 'good' ones compared to any other debt instrument. So the short answer to your question is: whatever you do, dont use it. You want to sit there and have it look pretty for you like the apologists on here who are 'maximizing rewards' and 'PIF' then fine. But chances are thats not going to be you
I'm gonna have to deploy words no man wants to hear...You're doing it wrong

I think you got it twisted son, I'm not 'doing it' at all. I can see through it and I'm not on the merry-go-round. My message is more a warning for what could happen to those 'doing it'

Re: What does everyone do with all this credit?

Anonymous — Mon, 12 Mar 2018 18:39:08 GMT

Dang... someone moved this topic and caused my reply not to post... now I have to start all over.

I'm the polar opposite of most everyone here. While most folks here reach for sky high limits on many cards, going for the $100K club, the $500K club, etc... here I am with just 3 cards, all with wimpy limits (ranging from $500 to an oh so impressive $2000...lol). This is self imposed... if a card has an auto CLI or I apply for a new card and the SL is higher than I'm comfortable with, I call and have it lowered. I do this because I have to stay within a tight budget and low limits keep me from overspending... even if I max all 3 cards out I can still pay them off.

In fact, my low limits saved me a bunch yesterday. I was looking for a hotel in Florida for an upcoming trip. The first place I looked at was $250 a night... ouch. Plus it was "pay in full in advance" and "no refunds for cancellation", which means with taxes I would have had to pay over $2000... a bit hard to do when that's more than my highest limit. I ended up doing some searching and found a place that was only $148/night, making the total bill under $1300, and when I booked they only charged me for the 1st night, so I have plenty of time to zero out my cards before the trip. So, my low limits saved me a TON of money.

Re: What does everyone do with all this credit?

Adkins — Mon, 12 Mar 2018 18:40:57 GMT

@K-in-Bostonwrote:
Count me in the “I need it for utilization” category. I use a spreadsheet and I enjoy free vacations.

I was thinking of you, K!

Re: What does everyone do with all this credit?

jl4 — Mon, 12 Mar 2018 18:56:55 GMT

This is all wonderful information. I mentioned opening a couple new cards over the weekend to my DGF and her first word was "why?" coupled with puzzlement so I explained the whole UTL padding concept, balance reporting and PIF, in addition to flexibility and demonstration of credit management to prospective lenders since I've had a not-so-clean credit history. She just doesn't see the need whereas I need some help to climb up to her level because life, ignorance, divorce, layoffs, etc., have all happened.

Of course this question comes from someone with a score set in the 780s and a single card, Advantis CU, with a $5000 limit and has never missed a payment on anything by so much as a heartbeat a day in her life. (I envy her money management skills, to say the least).

After the bonus windows close, I've been pondering what to do and it sounds like a not-insignificant amount of folks follow the AZEO rule, though my mom did that and CapOne closed two of her cards... I assume because she zeroed them for a couple years straight.

Re: What does everyone do with all this credit?

Anonymous — Mon, 12 Mar 2018 19:06:52 GMT

@jl4wrote:

After the bonus windows close, I've been pondering what to do and it sounds like a not-insignificant amount of folks follow the AZEO rule, though my mom did that and CapOne closed two of her cards... I assume because she zeroed them for a couple years straight.

There are two ways to do AZEO without leaving cards unused for years and having them closed:

1. Use the card as usual, then pay it off in full before the statement close date, so the statement balance is zero. This is the balance that is reported by most card issuers. (If you have any Chase cards, they will report a zero balance anytime you PIF. For them you don't have to wait for the statement close date).

2. Rotate between the cards, so a different card carries the non-zero balance each month. That way every card shows usage a few times a year, but you can still do AZEO.

Also, you don't have to AZEO all the time... it's mainly a trick to boost scores before applying for something new, like a car loan, mortgage, or a new card. As long as you keep utilization under ~30% your scores will be good even without AZEO... even better at under 8.9%.

Re: What does everyone do with all this credit?

K-in-Boston — Mon, 12 Mar 2018 19:04:22 GMT

Just a reminder that all posts here need to be Friendly, Supportive and Respectful. We can all have opinions without it becoming heated.

Responsible credit use is like alcohol consumption. Just because others have or have had problems doesn't mean that there aren't those that can use credit (even large credit) responsibly. It's also just as easy to run into trouble with a couple of low-limit store cards; it's all relative depending on the person.

Re: What does everyone do with all this credit?

Anonymous — Mon, 12 Mar 2018 19:05:03 GMT

@Anonymouswrote:
Dang... someone moved this topic and caused my reply not to post... now I have to start all over.

I'm the polar opposite of most everyone here. While most folks here reach for sky high limits on many cards, going for the $100K club, the $500K club, etc... here I am with just 3 cards, all with wimpy limits (ranging from $500 to an oh so impressive $2000...lol). This is self imposed... if a card has an auto CLI or I apply for a new card and the SL is higher than I'm comfortable with, I call and have it lowered. I do this because I have to stay within a tight budget and low limits keep me from overspending... even if I max all 3 cards out I can still pay them off.

In fact, my low limits saved me a bunch yesterday. I was looking for a hotel in Florida for an upcoming trip. The first place I looked at was $250 a night... ouch. Plus it was "pay in full in advance" and "no refunds for cancellation", which means with taxes I would have had to pay over $2000... a bit hard to do when that's more than my highest limit. I ended up doing some searching and found a place that was only $148/night, making the total bill under $1300, and when I booked they only charged me for the 1st night, so I have plenty of time to zero out my cards before the trip. So, my low limits saved me a TON of money.

Low limits or not, you can search for cheaper alternatives before you buy anything, though.

Re: What does everyone do with all this credit?

Anonymous — Mon, 12 Mar 2018 19:08:37 GMT

I am carrying some 0% debt which jumpstarted my emergency savings and put it on steroids.

I pay all of my other cards in full each month and take advantage of the grace periods. Whatever card is my daily driver will typically have $3-$5,000/month charged on it. The CLI I recently got on it serves no purpose other than keeping my util low when the balance reports.

Re: What does everyone do with all this credit?

Anonymous — Mon, 12 Mar 2018 19:19:19 GMT

@Anonymouswrote:
@Anonymous
Low limits or not, you can search for cheaper alternatives before you buy anything, though.

True... but in this case the limit forced me to do so... with a high limit card I might have simply jumped on the more expensive (and admittedly, much nicer) hotel. It's a habit from when I had more money. Recent events have forced me to rein in spending, and lowering limits was part of that. Eventually I'll get used to the more frugal lifestyle, and I can eventually let my limits go (a little) higher as my savings account grows again.

I guess my point is, there's no need for limits that are many times one's monthly spending for most of us, if you do the smart thing and pay your cards off every month. Carrying balances is costly (except for 0% offers). Utilization is important, at least when you need your scores to look good when applying, but that's easy enough to manipulate when you know when balances are reported regardless of your limits or "actual" utilization.

Re: What does everyone do with all this credit?

Anonymous — Mon, 12 Mar 2018 19:12:08 GMT

@Anonymouswrote:
@Anonymouswrote:
@Anonymous
Low limits or not, you can search for cheaper alternatives before you buy anything, though.
True... but in this case the limit forced me to do so... with a high limit card I might have simply jumped on the more expensive (and admittedly, much nicer) hotel.

In the end, whatever works for folks WORKS.

Enjoy your trip to FL. I'm from Tampa and heading there next week. I am DONE with the cold