Do you think current limits impact future limits?

[Anonymous]

I've seen this topic argued equally both ways so I'm curious to hear more opinions supporting both arguments.  Some feel that current credit limits positively impact future credit limts, while others feel that they can negatively impact future credit limits. 

Argument 1:  Current credit limits impact future credit limits positively.  For example someone already possesses 3 credit cards, all with solid 5-figure limits.  They apply for a 4th card and feel that their 5-figure limit approval was made possible due to already having limits at or around their recent approval limit.

Argument 2:  Current credit limits impact future credit limits negatively.  Same example, a person already possesses 3 credit cards, all with solid 5-figure limits.  They apply for a 4th card and feel  that their low 4-figure limit approval was lower than it should have been because the creditor saw all their other higher limits upon review and didn't want to "compete" with them.   

Of course, the converse of these arguments can be made as well.  Someone can have three low-limit cards and feel that a 4th card added with another low limit was given due to only low limits being present already.  Someone else could argue that a 4th card added with a high limit, much higher than the 3 low limits already in possession, was given to entice the card holder to favor that new card over their older, lower limit cards.

Some personal opinions on this would be fun to hear, as well as any personal experiences surrounding this topic.

[kdm31091]

I see both sides of it. A creditor wants to see that you can handle higher limits. This makes them more comfortable in extending a higher limit going forward.

But, there's also the issue of exposure. If you already have a ton of high limit cards, it may appear you are unlikely to really use another card, so it could be seen as a negative.

I think much of the time, people are issued a lower limit than they expect because their profile, despite maybe having some high limits, may have some negative things like excessive recent inquiries or new accounts. Since these present a risk factor, the approved limit is lower, despite other high limits. So "high limits beget high limits" is not entirely true. It's important not to overlook the risk aspect. You may have great credit and high limits, but if you appear credit hungry, another creditor will not likely extend a huge limit at that time.

I just try not to over analyze these things because what I've learned is that it's always YMMV and the "rules" for each creditor regarding limits are rarely set in stone.

[Anonymous]

Believe the answer to your quandary lies with the individual lenders. Both your argument 1 and 2 hold water depending on how a lender's risk tolerance model is set up. In looking back over my life with credit cards (spans many years) I could support both arguments as one of my lender's denies my application for a new credit product/CLI request based on too much open available credit over all my credit while a different lender stretches to match my credit bureau reports highest credit lines. Saw this happen often.

[SecretAzure]

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@Anonymous wrote:

Believe the answer to your quandary lies with the individual lenders. Both your argument 1 and 2 hold water depending on how a lender's risk tolerance model is set up. In looking back over my life with credit cards (spans many years) I could support both arguments as one of my lender's denies my application for a new credit product/CLI request based on too much open available credit over all my credit while a different lender stretches to match my credit bureau reports highest credit lines. Saw this happen often.

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Expanding on this, could you provide your opinion on which lenders lean in which direction?

For example: My opinion is Amex and Discover like to bump you up to match (or supercede) other cards while Synchony likes to limit you to lower Credit Limits if you're too exposed.

[redpat]

At a certain point in time higher and higher limits or more and more credit doesn't mean much.  You can only borrow so much and the creditors will AA you once they think it's out of hand.

Funny how I see on these forums w/ Amex 3x, 50k is the new 25k.  25k is a great credit limit to have but now some want to push it to 50k then back out if they get the t form, then try for a lower limit.  Look Amex will never let you get that high anyway. 

[Anonymous]

Just look at the people who have bankruptcies and only have one store card or whatever left. They get a $10,000 American Express out of the gate where rebuilders have been rebuilding for 5 years or more and forced to be happy with $1,000 Chase Freedom. TLH ToyLimitHell at least your cards match right? In that example you have no limits and rewarded with the high limit. That is like someone who has been in prison for 10 years has an awesome driving record, given low insurance premium!

For some reason years at a current address and former address plays a minor role. someone in their mid-twenties might be given a little bit more on several accounts ven if income and actual age of accounts is the same as someone 19 or 20 years old.

If you have 4 or 5 bank cards I suppose they should all closely match. if you have 20 of them are you taking home the income of 4 people?
I don't adjust my limits or wish my limits to be a proportion of my income. I want each card to be a proportion of how I use them in my budget that way I'm back into reality real quick.

Before barclaycard put the hammer down on me they were AUTO matching all of my limits and then some.
Discover has matched and awarded better, amex is stingy to me.
Synchrony ebates gave me multiple autos, my second highest visa.

[Anonymous]

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@redpat wrote:

At a certain point in time higher and higher limits or more and more credit doesn't mean much.  You can only borrow so much and the creditors will AA you once they think it's out of hand.

Funny how I see on these forums w/ Amex 3x, 50k is the new 25k.  25k is a great credit limit to have but now some want to push it to 50k then back out if they get the t form, then try for a lower limit.  Look Amex will never let you get that high anyway. 

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Well if your income "supports" the higher limits why not go for it, right?  I think this phrase is one of the most hilarious out there. 

Give a guy with $50k income a $50k line of credit over time because his income "supports" it.  In what world?  This person couldn't even bounce back from running up 50% of their limit, much less maxing it out. 

[washpadude]

Navy FCU listed "low limits on bank cards issued in the past 12 months" as a reason for the 1k limit on my new card in September. I guess they disregarded my 26k Venture because it is an outlier. Of course, being NFCU, they bumped it to 12.5k after 90 days.

[Gmood1]

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@Anonymous wrote:

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@redpat wrote:

At a certain point in time higher and higher limits or more and more credit doesn't mean much.  You can only borrow so much and the creditors will AA you once they think it's out of hand.

Funny how I see on these forums w/ Amex 3x, 50k is the new 25k.  25k is a great credit limit to have but now some want to push it to 50k then back out if they get the t form, then try for a lower limit.  Look Amex will never let you get that high anyway. 

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Well if your income "supports" the higher limits why not go for it, right?  I think this phrase is one of the most hilarious out there. 

 Give a guy with $50k income a $50k line of credit over time because his income "supports" it.  In what world?  This person couldn't even bounce back from running up 50% of their limit, much less maxing it out.

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Are you one hundred percent sure of that? Lol

I know several with those $50k incomes that would make you envious, if you saw their bank accounts. Lmao

There are no absolutes in what a person should have as a limit, just because some of us can't manage our own money. If they have the spending power, give them a limit that allows it.

I'm not here to push my thinking on others. Simply because I have no idea what their real world circumstances are.

Back to the original question, if over time that individual displays they have the discipline in managing their accounts. And the profile fits. The limits will gravitate towards one another eventually.

Not all lenders will try to meet other CLS in the beginning. Some need time to see how you handle your accounts. Most CUs come to mind of being this way, besides NFCU. 

There are no guarantees in your limit size regardless of your current limits or income. I've seen it on these forums many times. A person feels insulted because they received a $2000 limit and earn several 100,000 a year. Lmao

[redpat]

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@Anonymous wrote:

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@redpat wrote:

At a certain point in time higher and higher limits or more and more credit doesn't mean much.  You can only borrow so much and the creditors will AA you once they think it's out of hand.

Funny how I see on these forums w/ Amex 3x, 50k is the new 25k.  25k is a great credit limit to have but now some want to push it to 50k then back out if they get the t form, then try for a lower limit.  Look Amex will never let you get that high anyway. 

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Well if your income "supports" the higher limits why not go for it, right?  I think this phrase is one of the most hilarious out there. 

Give a guy with $50k income a $50k line of credit over time because his income "supports" it.  In what world?  This person couldn't even bounce back from running up 50% of their limit, much less maxing it out. 

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+1

Wealth isn't built on how much you think you can borrow.