CC's with ridiculous limits...why?!

[jdirilo]

Just trying to better understand this credit game, that's all. When I see people post that they have total credit limits of $20k, 30k, 50k, etc, I can't help but wonder...what do you do with it all?! Obviously most of you have a decent income and aren't using your cc to pay monthly bills, or are you? If you have 5-10 cards with high limits, how are you using these each month? Gas or food? Flights? Business? Just curious because my highest cc is $2500, and I just don't see how anything higher than that would benefit my credit other than overall util and limit. What am I missing here? Please be gentle!

[Open123]

For business, I find high limits extremely valuable for such things as quarterly tax payments, travel & dining, paying vendors and capital expenditures.

For personal use, $20K is really all I need, since my monthly charges are never very high, unless it's the Christmas season.

Mostly, for very high one time charges, I'll just use a charge card and not worry about the static limits.

[Anonymous]

The higher your limits the more you can spend while still staying at a low utilization

[09Lexie]

Overall util definitely helps with my credit score. No, I don't use anywhere near my CL. I rotate my cc's unless there are specific purchases that can benefit me.

[Anonymous]

I use certain cards for specific monthly expenses BUT I always PIF. 

Things each month that get put on a card then paid off right away:

Cell Phone

Electric bill

Gas bill

Cable bill

Groceries (Going to be exclusively on my BCP)

The trick is never allowing any of these or other bills to escape being PIF.  Its a reward thing actually. Why pay cash when I can grab reward dollars, points or miles?  I am just 100% set in stone about paying them off before the statements close.  No ands ifs or buts.

But to answer your question OP, the high limits permit higher usage while holding a lower util.  they also tend to attract other higher limits.

[jdirilo]

PSouz, I understand that part. But I guess what I am wondering is what people "spend" that much money on each month?! Maybe its too personal of a question, which I don't mean it to be. Just trying to grasp the whole concept of having cc's since I only have a few and I want to make sure I am using them wisely. I spend a lot on food and gas. And of course, "shopping" too. But I think $2500 is plenty credit for me(total cc limits are $3500) I can't imagine how people manage to stay well under their $25000 cc limit! For me that would just be too much temptation.

[jdirilo]

That's another thing I need to be educated about. Once I reach prime card status(not for awhile) how do you know which is better? I have never used my rewards points with nfcu, it doesn't seem worth it to me. I couldn't differentiate between all the prime cards and their benefits, I don't have a clue what ill app for when my scores are high enough.

[Anonymous]

I'm not sure if its true, but I just feel that having higher limits looks better to future lenders, I got my bce with a limit of 7600, way more than I needed, but still made sure to request a CLI on day 61 and got it up to 14k, I will never use even close to that. But honestly I think its kind of cool to have a limit that high at my age. And I dont have to worry about my utilization because the most I spend in a month on all my cards combined is 1000

[Open123]

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@jdirilo wrote:

I can't imagine how people manage to stay well under their $25000 cc limit! For me that would just be too much temptation.

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Not if you know you have to pay it back!  Regardless of how high CLs one has, it isn't money, but credit that has to be repaid.

Credit is just temprorary purchasing power (that can disappear at a moment's notice) that has to be repaid.  Having high CLs isn't about using it, but spending comfortably without worry about hitting the limit or high utility reporting.

[Anonymous]

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@Anonymous wrote:
The higher your limits the more you can spend while still staying at a low utilization

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This. I put most of my monthly expenses on my cards and end up with 3-5% util when the statement cuts. I just PIF right after. Having higher limits is convenient b/c I don't have to worry about being close to my limit or paying multiple times each billing period.