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

[ryanbush]

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@Open123 wrote:

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.

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This is pretty spot on analysis, although I would guess individuals with a extremly high net worth would need more then 20k personal limits.  Altough at that point I guess you could always just utilize charge cards.  

I have seen my dad charge 60k a time on his credit card paying his suppliers (business).  That will do quite a bit for your points account! 

[enharu]

for all kinds of stuff.

imagine putting an entire year of college tuition on a card. that's money that you have to spend anyways, so might as well accumulate all the points/cashback u can for it.

i would even put an entire car on a credit card if the dealership allows it.

other than that, it's for the prestige. It looks good to have a 100k limit card for example

[Anonymous]

High limit means high score and high score means high limit.Its simply mathematical fact

I don't think any one can contradict that with facts

[distantarray]

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@enharu wrote:

for all kinds of stuff.

imagine putting an entire year of college tuition on a card. that's money that you have to spend anyways, so might as well accumulate all the points/cashback u can for it.

i would even put an entire car on a credit card if the dealership allows it.

other than that, it's for the prestige. It looks good to have a 100k limit card for example

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Look good for who?   just inflates your online credit forum ego, but even lenders won't see your 100k limit since Fico doesn't report anything past 50k =P

[Open123]

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@enharu wrote:

imagine putting an entire year of college tuition on a card. that's money that you have to spend anyways, so might as well accumulate all the points/cashback u can for it.

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+1

I never advocate spending money that you otherwise wouldn't for rewards and/or sign up bonuses, but only that which you were going to spend anyway.  For instance, I've got to pay my taxes, or go to jail, be placed in financial purgatory and ruin my financial reputation for 10 years.  So, if I have to pay, mind as well get a rebate on them since the fees on using a credit card have gone down considerably since when they were first offered.

[lg8302ch]

for me 5k is a good limit. just tried how far I would get with Discover while travelling and it simply did not work. within 7 days my limit was reached ! but actual charges were for like 1500$ and the rest just some temp holds for hotel and rent a cars but blocking the limit. thought no problem I simply pay off and it will reset my limit. this is when I noticed that Discover does not accept payments for transactions in status processing ...well I did send the payment via my banks bill pay and like this managed to pay off the amounts in processing too generating a positive balance for a few days. this is when I realized this card cannot be used for travel due to the CL. with the 5k cards I have had no problems in the past. this test failed and I will not use Discover other than for the bonus categories and through ShopDiscover. I can simply not do it with 2,5K
also find that Discover charges remain for very long in processing status compared to other cards? or is it just because I was waiting to pay off.
this is when you appreciate higher limits

[navigatethis12]

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@Anonymous wrote:

High limit means high score and high score means high limit.Its simply mathematical fact

I don't think any one can contradict that with facts

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Not necessarily. You can have three cards with 25 thousand limits and each be maxed out and you would have a low score. You can have three cards with 1000 limits and each at 2% utilisation and you would have a much better score. High score does not mean you will get a high limit. I have scores hovering around 760-780 and in November was approved for a 1000 card.

I never let statements close with balances so utilisation is not important to me. I do like the higher limits so that I can purchase inventory without having to pay the card off multiple times or losing a bid because I didn't have enough credit available to purchase the item.

[Anonymous]

I guess it comes down to individual credit profiles but overall high score means instant approval and likely high credit limits
It's even noted on the my fico analysis on the section ::What your score means::

[thom02099]

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@jdirilo wrote:
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.

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Credit is a very individual thing.  You are comfortable at the level you cited.  Others are comfortable at other levels.  It's all a matter of management.  But in my opinion, one should never step outside their comfort zone, whatever that may be.  If you're happy and comfortable where you are, I say MORE POWER TO YOU!  You've already learned a valuable lesson, to stay where you're most comfortable.  Unfortunately, too many folks (in general as well as at forums like this) get caught up in "the thrill of the hunt" for more credit, and lose track of that comfort zone.

As others have said very well, credit begets credit.  The more you have the easier it becomes to get more...usually.  There is a point of diminishing returns, and the risks become a factor. 

What do people spend to reach those credit limits?  We don't.  We (most of us, anyway) try to stay in that "sweet spot" of under 10% utilisation, and the most ideal spot is reportedly in that 5-7% range of utilisation.  If you have higher limits, it's much easier to use credit and still stay in that area. We pay bills that we would have to pay anyway, and use our cards.  I formerly used a debit card to pay my household bills (utilities/cable/cellphone/etc), which was crazy because I got no benefit from it.  Now I run those through my credit cards and then PIF as soon as they post to my accounts.  Discretionary spending also gets run through the credit cards, then PIF when they hit the card account.  Only exceptions are things like car insurance and mortgage, which I have taken directly out of my credit union account...I don't mess with those and credit cards.   

I have over $120K in available credit.  But I start getting antsy when my utilisation gets over 6%.  I know that it's only a temporary situation since, with a few exceptions, I PIF each month.  I do use BT on 2 cards to take advantage of basically interest free loans, since they will be paid well before the end of the promo time. 

Much of having high credit limits is also to plan for the future, regardless of what stage in life one is at.  For those young and starting out, and already accomplishing high scores and limits, they are strategically putting themselves in a place where, managed correctly, they will be in a much better position to get the best interest rates IN THE FUTURE, for say, car loans, personal loans, mortgages, etc. They have learned a valuable lesson in money management, and it will serve them well for the future.

For those of us that are older and in some cases nearing retirement age, it's nice to have that credit established so it's available for usage IF NEEDED.  The trick is not to NEED it, but simply have it available. 

Since I plan to retire in the not too distant future and do some travelling, I like the idea of having cards that will allow me to do that in comfort, and have the resources to pay the bill IN FULL when it comes due.  If I didn't have some high limit/NPSL cards, I would not be able to plan a trip to, for example, New Zealand, which will cost approximately $7500-$9000 depending on how much time we spend there.  High credit limits allow me to plan a trip of a lifetime, without worry.  And since I'm currently accumulating points on certain cards that I'm using, some of that expense will be off-set by the points that I now accumulate and will use, and I will accumulate more when taking the trip, thus putting me in a position to plan another trip. 

Credit begets credit!

[jagshere]

When I first started reading the forums, I couldn't understand high limits either. But the post I read and I quote another forum member "Have a lot, but use a little". If you can't afford it DON'T buy it or USE your card for frivolous purchases.

The obvious for a Score mavens is utilization, but the lenders also compete for our business knowing that this will be a positive revenue stream every month!