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

[jdirilo]

Well thanks for explaining I figured it was for overall util but I think I understand it fully now. It's more "comfortable" persay? I guess it makes sense. If I had a $10000 limit, my util would drop a ton and my score would sky rocket. Well, once I get these cards PIF I will! I am in between jobs right now, which is why I've been using my cards frequently for everyday purchases. Once I'm working again, I will pay them off right away, at least the highest interest one which I think is cap one.

[Anonymous]

My total credit isn't as high as most here. It's $7K total. But my reasoning is a little different. I want to buy a house in a couple of years and want to build up decent lines for emergency use. I.e. If right after I move in, the ac and plumbing go out. My thought is I don't want to have to stress about something like that. Hopefully I'd have cash, but if not I want to be able to deal with potentially pricey emergencies.

[oscar_actuary]

long post.... sorry got carried away.  cheers.

I'll offer a slightly different perspective because I'm a dumb redneck from Alabama. Ok, maybe not all of that is true. I got the high CL, not by design.
2001: Got a BofA card in order to transfer 8% Car Loan to 0%. I don’t recall the initial limit but I think it was over 10k, now its 17.6k. I never asked for a raise.
Some time between 2002 and 2008 acquired Sams Club Discover (for the 2% CashBack, once you hit 10k, and I was already paying to be a member), and a Chase Card which has since been converted to Freedom. The Same Club started around 5k and is now 10k. Freedom is now 16.6k and started around 10-12k.. Gosh, I really didn't keep track. Back then I really only used them to transfer other debts and put some items on Sams

Then starting in 2009 we really went crazy trying to earn CB on Sams Club.
We added Amazon Visa (Chase) for the rewards on Amazon purchases. I've only recently noticed they pay 3% CB on groceries. All this time.
Time after time I threw away offers for other cards. Figuring it never made sense to worry about it when I had the SamsClub Discover for 2% CB.

Then comes 2012, March. And we're tired of the high rates on our 2nd mortgage and frustratingly wanting to refi the 1st/2nd. Then we hear about HARP. Refi the first. It get me thinking, we app for a few cards and transfer the rest of the 2nd Mrtgage to 3 new cards (18k total CL. Discover, Chase Slate, StateFarm Visa) with $0 transfer fee on the first two. So, again, I just got them to take advantage of low interest and dedication to payoff the high 2nd Mortgage/
That gets me up to 67,200, including 2k on a PayPal card (which I grudgingly got because PayPal kept harassing me. And recently realized it also pays 3% on Gas and Restaurants, always. See, I only used the Sams Club for EVERYTHING before this month, pretty much.

Ok, then just this month I started waking up to all these 5% cards, including my own Freedom and Discover Cards and starting checking out this forum. Citi and BofA were both offering cars that gave decent CB and $100 bonus for using them $500 in first 3 mos. Free money is good. (8k and 7.3k CL respectively). Then I start reading about PenFed and 5% gas all the time every time sounded great. Also, CU rates loan rates looked good. 18 month 0% transfer gave possibilities for paying down a 4.95% car loan, if I played it right, $250 max transfer fee. Well, when they said sure, and here is 20k CL, that got us up to $102,500 CL.

For me it had nothing to do with utilization. It started as convenience and debt consolidation at 0% Ditto for getting 3 more in 2012. Ironically, back then I was getting 1/2 the CL per card I get today. Now, I'm interested in CB Rewards (and Discover discount mall is sweet). With the exception of 25-35% utilization while we were paying off the transferred 2nd mrtg, our TB is under 5k and PIF.  Honestly, I was a bit flabbergasted to end up with this much avail credit. I realize now its not unusual

My regret is that I was too lax in considering my wife's credit. I think only 1 if any, card is in her name. She does have a couple dept cards.
We haven’t paid interest on CC in at least 25 yrs, possibly ever.  Don't worry, I did finance 10k car stereo with IRA money.  So, yep. Pretty dumb in past.

If this recent apping hurts our new refi approval, I'll wish I had waited. But, I had no clue we were going to get a call and have an offer to consider worthwhile. So yeah, I sorta seem to luck/fall into some of this.  No utilization strategy at work.

Edit for date correction

[UFGuy2006]

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@09Lexie wrote:
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.

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Agree here. I have some pretty high limits aquired over the years... but I definitely do not use them. Its a nice to have I guess...

[zeusta20]

My total CL is 23.2k. I wish it was higher, but in due time. Just like everybody said on here, it def helps with UTL. Its also pretty cool to have and it also gives you that peace of mind. Putting everything aside, sometimes it just HAPPENS. Based off of your credit score, income, etc. Sometimes the CC company wil just give you a high limit because of how you manage your debt responsibly in the first place.

For me, one of my big goals, is to save up for a car, use my credit card to purchase it (having the money to back it up of course), and pay off that credit card as if that purchase never happened, BUT, at the same time, I'm earning a sh** load of rewards points.

[boomhower]

Utility, utility, and utility.  Plus over $5k gets you signature or worldcard status which has it's own benefits. 

[L0RDAVENTAD0R]

Another reason is people who make a lot spend a lot. This helps when they have high lines of credit.

So someone who spends $5,000 a month & puts it all on their CC gets 60,000 pounds/cashback somewhere while keeping their utilization down if their total credit line is like $50,000 (10%).

[Sevenfeet]

The rest of the group is right...high credit limits do wonders for your overall utilization.

But it's not always about that. Take my situation for example. First, my Penfed card's limit was what I asked for to clean up some old debt via balance transfer faster than what I could have paid it otherwise. Second, my Chase Freedom is a special case. Since its interest rate is so low (prime, 3.25%), my wife and I use it like a home equity line of credit to park purchases on it that are outside our normal budget (like paying for summer camp for the kids). Our plan is still to pay it off completely by the end of 2014, but it allows us to use Chase's money at rate completely tolerable for use as a longer term loan.

Sometimes, it's all about flexibility.

[youngandcreditwrthy]

I would never use near my $130K+ of avail cred!
Having that much cred increases my overall credit profile and score imo.
It's important to me to have great credit in general and in case of a personal "financial crisis"
Having access to capital is the best/most important thing in a Capitalism oriented economy...
Just my .02.
My bills maybe amount to $200/mo haha

[youngandcreditwrthy]

Having a lot of prime cards also makes your creditors more competitive imo as they can see who they're competition is right on your CR ;-)