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Credit Limit too high?

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Regular Contributor

Re: Credit Limit too high?


@BronzeTrader wrote:

 

I asked to decrease my credit lines all time.  This way I can limit my own exposure to certain bank and keep my credit relationship with them open.  Almost no bank wanst to keep a $100,000 or $200,000 credit line open with one single person or family.  Over the past year, I've closed or decrease my total credit line $200,000.

 

I have a dear friend that spends more than 100k per month on a card; do you think the bank wants to cut ties with that person?

 

I think it is reasonable to say that exposure should be based on income, assets, and spending. What multiple of income is reasonable? How much net worth should one have for 100k of revolving exposure at a single bank? What kind of spend should a consumer maintain to keep that kind of line? I think the banks have answers to all of those questions and more, and any that extend the opportunities carefully consider it beforehand.


Gardening from 10/1/2017 to 4/1/2018.
Message 11 of 59
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Regular Contributor

Re: Credit Limit too high?


@UpperNwGuy wrote:

When I first joined this forum, I was surprised by the relentless zeal with which some members were seeking increases to their credit limits.  Realistically, if you pay off your charges each month, you don't need extremely high credit limits.  In my case, unless it is Christmas or a vacation month, my monthly throughput on credit cards is about $2,000.  To maintain a utilization rate of less than 10%, the most credit I should need is $25,000.  Even with a buffer for Christmas and vacation months, the most credit I should need is $50,000. However, I have over $100,000 in credit limit distributed across seven cards.  It's frankly more than I need.  Yet I keep reading about folk who have combined credit limits of $200,000 or $300,000 and are seeking further increases.  I'm not sure what their objective is other than the satisfaction of knowing that banks trust them with high credit limits.


Interesting post, and I've found this interesting in the time I've been here as well. Personally, I'm seeking 3-400k in total lines with several cards in the 75k-100k range. My regular spending is quite high, and some months are remarkably high. For example, I spent 24k last month across personal cards. Ten percent of total credit lines would be 240k and a non-penalty single card at <30% would be just under 75k. I'd have a hard time convincing any lender to give me that kind of CLI, but it seems pretty easy for people with much lower spend (and presumably income) to get limits well in excess of their needs. Truth be told, I have more than I "need" now. I can pay for anything I want with a charge card, and I have another 100 something k to use on revolvers in any given month. If it wasn't a hobby, I wouldn't bother seeking more credit.

 

Regarding those other people you mention: some of them probably spend double or triple what you do and have lines that accomodate that. Others are just interested in this as a largely harmless hobby. Others are pushing limits up to control ever ballooning utilization.


Gardening from 10/1/2017 to 4/1/2018.
Message 12 of 59
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Established Contributor

Re: Credit Limit too high?


@Chickenpotpie wrote:

OP I don't think its them waiting for you to screw up, they're rewarding you for a job well done!    I limit the cards I have (I have 4) and most of my increases were organic, sans 2.   I've gotten all the credit I need on them.

 

A bit more credit helps utilization.  so if you're scores are good and you're using maybe 1-5% of your total credit, additional padding just helps keep the scores higher.

 

No matter how much you have, rule of thumb is never use more than you can afford, and if you spend it,  and if you spend it, you sure as heck have to pay it back!

 

If you feel its too much temptation, or it makes you uncomfortable, ask for a decrease.


+1

**FICO 8 Scores Nov 2017 EQ 759 EX 744 TU 748**


Message 13 of 59
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New Member

Re: Credit Limit too high?

Thanks for alll of the replies on this. I'm glad I asked!
Message 14 of 59
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Contributor

Re: Credit Limit too high?


@BronzeTrader wrote:

@pchbuttercup wrote:

Hi everybody, Newbie here.  I have received some letters from credit cards saying they increased my CL to pretty high amounts, $16k, $20k, that sort of thing.  I do use credit cards for anything I can, but usually a few thousand on one or two of them, and I always pay off at the due date.  I have excellent credit.  I am wondring if there is a negative to asking them to decrease my CL, or if it's something I should even worry about.  

 

I have around 10 good credit cards (Visa, AmEx, Discover, MC) and a few retail cards.  Are they just waiting for me to screw up?  Would love to hear your thoughts.  TIA!


I asked to decrease my credit lines all time.  This way I can limit my own exposure to certain bank and keep my credit relationship with them open.  Almost no bank wanst to keep a $100,000 or $200,000 credit line open with one single person or family.  Over the past year, I've closed or decrease my total credit line $200,000.

 

I had a Crate & Barrel card from Comenity, which had a credit line of $20,000.  Smiley Very Happy  I'll never buy that much dinnerware.  

 


Why would you EVER consider doing this?  NEVER ask for a decrease.

 

A store card with $20K limit helps with utilization and of course no one would buy that much from Crate and Barrell.  

 

And if you can't manage $200K in credit lines than you have a bigger problem that needs to be resolved.  Decreasing credit lines isn't going to  help that.

Message 15 of 59
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Contributor

Re: Credit Limit too high?


@noobody wrote:
just called US Bank, reduced my Cash+ CL by 50% (more than enough for a capped card), and Club Carlson by 95% (always have bad experience with chain, Just charge once a while to keep the points live, will close after burnt all the points).
I don't like unnecessary CL, it is waste lender's resource, make me uncomfortable if individual card CL is several times more than i need.
Overall utility is never a concern.

Please tell me  you are joking.  That makes absolutley no sense, especially coming from someone with scores likes yours.

 

FYI, you arent wasting a lender's resources.  They have MORE than enough resources to account for your CL.

Message 16 of 59
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Established Contributor

Re: Credit Limit too high?

I am NOT joking.
Since my score is very high, i get sp or auto CLI from us bank all the time. On those two cards, i absolutely not needing 5 dig CL.
EX819 1HP|TU797 1HP| EQ(Fico8 BankCard)841
Message 17 of 59
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Contributor

Re: Credit Limit too high?


@noobody wrote:
I am NOT joking.
Since my score is very high, i get sp or auto CLI from us bank all the time. On those two cards, i absolutely not needing 5 dig CL.

Asking for a CLD is beyond ridiculous.  No one will probably ever NEED a 5 dig CL and those that do need it use an AMEX black card.

Message 18 of 59
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Community Leader
Senior Contributor

Re: Credit Limit too high?

BronzeTrader is a unique case. He has over 30 cards currently, and he's closed over 30 in the past year or two.

 

I'm not too concerned about building my overall limits as I don't have any trouble keeping my overall utilization in check. But I do like my individual cards to have limits that are high enough to accommodate anything I might need to charge. I think that three cards with $15,000 limits would work well for me. That'll give me flexibility for surprises, and in normal spending months, I'll be able to spend enough to support those limits.

 

Right now, I have one card that's well over $15,000, and one card that's almost there. Because I don't see any of my other cards reaching $15,000 anytime soon, I'll add another card when I find a product I like. Outside of three $15,000 cards, a few cards that fill in rewards gaps are fine. Their limits don't have to be that high.

 

The only card that I'll likely push to a higher limit is AMEX. It's over $20,000 right now, and I'll likely take it a bit higher. The main reason for that is that AMEX doesn't seem to require a lot of spending to support a generous limit.

Message 19 of 59
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Regular Contributor

Re: Credit Limit too high?


@dlm0820 wrote:

Asking for a CLD is beyond ridiculous.  No one will probably ever NEED a 5 dig CL and those that do need it use an AMEX black card.


Spending 10-40k per month won't put anyone in a position to get a Centurion card, nor is it ridiculously uncommon. I posted earlier in the thread that I spent 24k last month. There was a single purchase that hit 5 digits, and none of this was on my AMEX charge card. The person I mentioned that spends six figures a month doesn't have a Centurion card.

 

I don't think reducing credit lines is always ridiculous. I would close cards if I had more than 20. I'd probably also consider CLD's if I was at some kind of exposure limit with a bank and wanted to apply for something new. I doubt I would do it if there wasn't some pressing need at that moment, however.


Gardening from 10/1/2017 to 4/1/2018.
Message 20 of 59
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