Why not give max SL instead of approving 2 cards?

[cr101]

There's probably a million reasons that lenders do this. I'm just wondering what you believe the main reason is for a lender approving someone's 1st card for $1k, for example, and then approving them for another $1k card days after that. Why not just give them the full $2k on the 1st card? Do you think that they want to give them the min to limit risk, and only consider more if the applicant asks? 

I know that a few CC companies are known to allow consumers to apply for multiple cards. Could that be another reason to not offer the max that they'd be willing to lend - bc they want to ensure that they don't allocate the entire max on that one card when there are other cards that the consumer may apply for?

[FinStar]

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@cr101 wrote:

There's probably a million reasons that lenders do this. I'm just wondering what you believe the main reason is for a lender approving someone's 1st card for $1k, for example, and then approving them for another $1k card days after that. Why not just give them the full $2k on the 1st card? Do you think that they want to give them the min to limit risk, and only consider more if the applicant asks? 

I know that a few CC companies are known to allow consumers to apply for multiple cards. Could that be another reason to not offer the max that they'd be willing to lend - bc they want to ensure that they don't allocate the entire max on that one card when there are other cards that the consumer may apply for?

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Many lenders tranche a variety of their core products for various reasons, whether it's based on profitability factors, exposure thresholds, inherent risks, segmentation, etc. They're obviously not going to share such proprietary data to the masses. And, we've all seen PenFed approve 2 cards back-to-back (sometimes 3) with identical limits, for instance. A lot of these outcomes are based on AI that is derived from each lender's UW algorithms. We've also seen some folks with existing cards and very high limits (same lender) and apply for another card and get approved for SLs in the $1k or $2K neighborhood.

[Aim_High]

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@FinStar wrote:

Many lenders tranche a variety of their core products for various reasons, whether it's based on profitability factors, exposure thresholds, inherent risks, segmentation, ...  A lot of these outcomes are based on AI that is derived from each lender's UW algorithms.

We've also seen some folks with existing cards and very high limits (same lender) and apply for another card and get approved for SLs in the $1k or $2K neighborhood.

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That was a great (and concise, I might add) explanation, @FinStar.  This topic ties into the larger topic of the various tiers of card programs that many lenders offer with varying terms and underwriting critiera.  Analyzing those tiers and approval data has been helpful to me in better understanding how credit limits change relative to not only profile but also the specific card in question. 

"We've also seen some folks with existing cards and very high limits (same lender) and apply for another card and get approved for SLs in the $1k or $2K neighborhood."

Yep.    I can vouch for that.  A great example was: my Discover approval in November 2019.

[collics]

*coughNAVYFEDERALcough*

[FinStar]

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@Aim_High wrote:

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@FinStar wrote:

Many lenders tranche a variety of their core products for various reasons, whether it's based on profitability factors, exposure thresholds, inherent risks, segmentation, ...  A lot of these outcomes are based on AI that is derived from each lender's UW algorithms.

We've also seen some folks with existing cards and very high limits (same lender) and apply for another card and get approved for SLs in the $1k or $2K neighborhood.

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That was a great (and concise, I might add) explanation, @FinStar.  This topic ties into the larger topic of the various tiers of card programs that many lenders offer with varying terms and underwriting critiera.  Analyzing those tiers and approval data has been helpful to me in better understanding how credit limits change relative to not only profile but also the specific card in question. 

"We've also seen some folks with existing cards and very high limits (same lender) and apply for another card and get approved for SLs in the $1k or $2K neighborhood."

Yep.    I can vouch for that.  A great example was: my Discover approval in November 2019.

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Below is a fairly recent example by another member:

https://ficoforums.myfico.com/t5/Credit-Card-Approvals/Discover-Approved-BUT/td-p/6433248

[Aim_High]

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@FinStar wrote:

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@Aim_High wrote:

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@FinStar wrote:

Many lenders tranche a variety of their core products for various reasons, whether it's based on profitability factors, exposure thresholds, inherent risks, segmentation, ...  A lot of these outcomes are based on AI that is derived from each lender's UW algorithms.

We've also seen some folks with existing cards and very high limits (same lender) and apply for another card and get approved for SLs in the $1k or $2K neighborhood.

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That was a great (and concise, I might add) explanation, @FinStar.  This topic ties into the larger topic of the various tiers of card programs that many lenders offer with varying terms and underwriting critiera.  Analyzing those tiers and approval data has been helpful to me in better understanding how credit limits change relative to not only profile but also the specific card in question. 

"We've also seen some folks with existing cards and very high limits (same lender) and apply for another card and get approved for SLs in the $1k or $2K neighborhood."

Yep.    I can vouch for that.  A great example was: my Discover approval in November 2019.

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Below is a fairly recent example by another member:

https://ficoforums.myfico.com/t5/Credit-Card-Approvals/Discover-Approved-BUT/td-p/6433248

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Your quote in that thread was exactly what happened to me. 

@FinStar wrote:  " ... Once you reach a really high TCL threshold, such as yours, Discover is not going to yield much at all ... once a profile reaches... say >$300K or higher, especially if one has a lot of tradelines, then those SLs tend to deflate ..."

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