CC Limits v. Income - Advice Needed Please!

[lhcole77]

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@pt310 wrote:

Ok, so I need some advice from my fellow MyFico'ers. Here's a short history~

Just last May, my total cc limits were $9,350. Now, thanks to the Forums and all of the wonderful people and advice, I've grown that to $42,300. This includes my "almost" 3x cli from Amex just two days ago! ($300 short, LOL)

My annual gross income is about $39K, so I've exceeded that with my limits.

Current cards include: Amex BCP, Discover IT, FBNO Amex, Wally, Vicky's, Freedom, Barclays, BoA, local CU card, and 4 Cap One's - 13 total cards.

No baddies, no lates, currently reporting +/- 15% util. (without the Amex cli)

Questions:

1. Will having my limits higher than my income cause any AA from any particular issuer? (Still can't believe I'm in a position to even ask this!)

2. Will this keep my other cards from growing more?

3. Should I wait for the recent Amex CLI to report before requesting CLI from anyone else (Discover, especially)? Would that help showing a larger limit on a competitor's card, or would it actually hurt my chances for a increase, (due to my income)?

4. If the total current limits will negatively affect future growth, I do have a few picked out for weeding - due to AF's. Should I close these and let them report closed before requesting any more CLI's?

Again, THANK YOU ALL!!!

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Thank you for this post. Though I'm not in this spot right now these questions have crossed my mind as I start to grow my credit file.

I'm curious as to what your AAoA is and the oldest ages on your CCs. Mind sharing that?

[09Lexie]

You've come a long way since last May. I agree with longtimelurker, if you don't need more than its perfectly fine to stop asking for more. Just because you could, doesn't mean you should.

1. To your questions on AA, some lenders have done CLDs due to credit to income but I don't think you are there yet.
2. It is unclear how it will determine future CLI's but I would assume so...if your CLs exceed your income and assets a lender should take that into consideration.
3. Again, how far over you can go before a lender gets nervous is anybody's guess.
4, If the cards you've picked out do not address a specific need and they have AFs close them

Tbh, you will drive yourself crazy trying to figure out what a lender will do. Certainly, abnormal spending habits, too many new accounts etc will draw their attention faster than CLI's on existing cc's IMO

[navigatethis12]

I have more than 2x income and haven't had any issues, yet. The only issuer I remember seeing not liking a lot of credit is Bank of America. There have been people that have had limits lowered because they had "sufficient credit" with their income.

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@longtimelurker wrote:

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@Bay_Area_Joe wrote:

For what it is worth, and no solid factual knowledge, but in my case here is what I have found.

My income is about 120k gross per year.

This is listed with total limits across all cards from each major bank.

Chase	28400	23.67%	4 cards
Citi	25000	20.83%	2 cards
Discover	19750	16.46%	2 cards
Pen Fed	39000	32.50%	2 cards
B of A	25000	20.83%	2 cards
GERMB	10000	8.33%	1 card

Also keep in mind NONE of these card issuers asked for any documentation.

Discover said they possibbly grant more CL if I send Docs.

B of A, said 25k is as far as they will go based on income.

Citi said they could manual review for more, but HP would be needed, I said no.

PenFed is only 5 months old, and did not want to push them.

GERMB also only 5 months old.

Hope this helps.

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It seems to vary a lot.   I have currently CL about 1.8x income.   Citi was the only bank that refused an increase on my lowest CL card (I asked to go from $7k-10K), because of "too much credit for income" 

Don't really know what Citi's issue really was!

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I can understand their reasoning. You and I know that we would never max out every credit card, but they don't know that. In reality I do not need anywhere near the amount that I have. I doubt the majority of people have more than or near their income in credit cards.

[pt310]

Seems Citi would be the one to give me any problems....but I don't have them!

And I'm not planning on even attempting to go over $25K on the BCP. I couldn't imagine having that much available on one card...couldn't ever imagine spending that much either, besides for a new car, (but definitely not on a cc).

Oh, here's something. One of my local supermarkets occasionally runs a coupon in their add for $10 off of a $50 gas card when you purchase at least $50 in groceries. So I get that deal with my BCP, and also get the 6% rewards! Lovin' it!!!

[pt310]

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@lhcole77 wrote:

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@pt310 wrote:

Ok, so I need some advice from my fellow MyFico'ers. Here's a short history~

Just last May, my total cc limits were $9,350. Now, thanks to the Forums and all of the wonderful people and advice, I've grown that to $42,300. This includes my "almost" 3x cli from Amex just two days ago! ($300 short, LOL)

My annual gross income is about $39K, so I've exceeded that with my limits.

Current cards include: Amex BCP, Discover IT, FBNO Amex, Wally, Vicky's, Freedom, Barclays, BoA, local CU card, and 4 Cap One's - 13 total cards.

No baddies, no lates, currently reporting +/- 15% util. (without the Amex cli)

Questions:

1. Will having my limits higher than my income cause any AA from any particular issuer? (Still can't believe I'm in a position to even ask this!)

2. Will this keep my other cards from growing more?

3. Should I wait for the recent Amex CLI to report before requesting CLI from anyone else (Discover, especially)? Would that help showing a larger limit on a competitor's card, or would it actually hurt my chances for a increase, (due to my income)?

4. If the total current limits will negatively affect future growth, I do have a few picked out for weeding - due to AF's. Should I close these and let them report closed before requesting any more CLI's?

Again, THANK YOU ALL!!!

---

Thank you for this post. Though I'm not in this spot right now these questions have crossed my mind as I start to grow my credit file.

I'm curious as to what your AAoA is and the oldest ages on your CCs. Mind sharing that?

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You're welcome! Thanks for the response!

Although my credit file is itself over 17 years old, My AAoA is currently around 6 years. I haven't pulled recently, so I don't have it exact.

I have several cards that have just crossed, or are closing in on 7 years, and most of those are the dinky ones, (except Chase).

My AAoA is lowered by several new accounts I opened this summer, but it wasn't as bad of a hit as I had thought it would be. I guess all the old loans & mortgages still on my report helped.

Good luck to you! Hope this helps!

[lhcole77]

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@pt310 wrote:

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You're welcome! Thanks for the response!

Although my credit file is itself over 17 years old, My AAoA is currently around 6 years. I haven't pulled recently, so I don't have it exact.

I have several cards that have just crossed, or are closing in on 7 years, and most of those are the dinky ones, (except Chase).

My AAoA is lowered by several new accounts I opened this summer, but it wasn't as bad of a hit as I had thought it would be. I guess all the old loans & mortgages still on my report helped.

Good luck to you! Hope this helps!

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Thank you. This info is very helpful. My AAoA is ~3 yrs, my oldest TL ~11yrs, but my CC AAoA is only 6 mos so I am trying to pace myself AND to learn what I can reasonably expect when app'ing or requesting a CLI--based on my short history.

[maiden_girl]

Only request what you need and only spend what you can afford to pay

[09Lexie]

Sums it up!

[kevinjjc]

My income is similar to yours.

Here's a summary of my credit:

  220,250 total of credit card limits

+  40,000 total of LOC limits

--------------------------------------------------

= 260,250 total of revolving credit limits

 CC/LOC                                                                                   LIMIT
American Express Blue Cash Preferred                          $18,000
Bank of America Platinum Plus Visa                                $12,500

Barclays NFL (NY Giants) Extra Points World MC          $10,000

Chase Freedom Visa Signature                                        $18,000

Chase Sapphire Preferred World MC                               $17,000
Discover it Card                                                                     $24,500
JCPenney/GECRB                                                                $5,000
Walmart Discover/GECRB                                                  $10,000
Navy Federal goRewards MasterCard                             $25,000
PenFed Platinum Cash Rewards Visa                            $50,000
Staples/Citi                                                                             $3,250
USAA Rewards World MasterCard                                    $12,000
US Bank Cash+ Visa Signature                                         $15,000
Navy Federal LOC                                                                 $15,000
PenFed LOC                                                                          $25,000

[Cdnewmanpac]

The problem with only requesting what you "need" is that issuers don't like to extend credit to those who need it. The reason to have generous credit limits when you don't need them is that they will be there when/if you do. It also allows you to spend "large" amounts (relative to typical spend) without exceeding 20% utilization on any given card. Additionally, high limits give you the option to leverage your credit for large purchases when doing so makes economic sense (adding a bathroom to your house today, using a zero interest card for 12-18 months, then paying off the balance with a fixed interest personal loan, for example).

To the OP: If you have an AF and don't benefit from the card, close it regardless of limit. If you actually get rejected for a CLI on a card you use and the reason is too much credit, then close some unused ones and reapply in 6 months. Credit is a long con, not a short one. There is no harm in reacting to what YOUR lenders do to YOUR accounts instead of trying to anticipate based on limited reports of the experience of strangers who may be in radically different circumstances.

And many people have total limits that exceed their income. The calculations for appropriate limits are usually based on whether a person can afford the minimum monthly payment if they max out the card, not the ratio of total limit to total annual income. Cards don't have to be paid off in a year.