Credit limits a perspective

[AndySoCal]

The perspective that follows I know there will be some that will disagree and have reasons for it. The disagreement is fine and I expect it.

When looking at your credit limit on an account here a couple things that I consider. I will use my own credit profile to illustrate my reasons and my point. My two lowest limit cards I have are my Walmart Capital One and my JC Penney cards.

First the Walmart Capital one card is one of my newest cards with a $3,000 limit.  My primary use of the card will be groceries for a single person I usally spend 150 - 200 a month. I may buy some other things as well.  The utilization is 5 to 7% on that card and  my total utilization is around 2 to 3 on all cards combined. I have no plans in asking for a CLI my monthly spending does not justify one in my opinion. 

The JC Penney card has a 4700 limit it is Synchrony Bank card. I think I could get a CLI if asked. I see no need most months it has a zero balance. Even when it does report a balance my utilization is less than 5% on the card for that month. All my cards the balance is paid in full each month.

EDITED TO ADD: My usual criteria for needing or wanting a CLI is if my monthly spending exceeds 10% month over month.  Those with families would need different credit limits than I do. 

My other credit cards my spending is around 2 to  3 percent of the credit limit if that.  From my perspective I would encourage people before asking for a CLI or apping for a  new card. Ask yourself the question how much spending realistically I am going to spend using that card month over month ? If the percentage is less than 10 percent month over month I would not bother.

There is a line of thought that it takes big credit limits to get big credit limits I disagree. Based on my personal experience my credit limits on my Discover, Citi Custom Cash, JC Penney alll started at lower limits. Discover started at 1500 to 2000, Citibank 5000 and JC Penney 100 ( no it is not a typo). In my longish history of credit my limits used to start at 500 now it is usally 10000 with in an exception or two.   Over the course of time creditors saw that I could be trusted with those limits they gradually would raise my limit through an auto CLI. It is time and only apping for the credit you need and not want that has served me well. There are a couple of exceptionsI have made to that guidance over that last 30 years I admit that. Hope this gives you something to think about as you build to rebuild your credit.

[Shooting-For-800]

Different strokes for different folks.

For me, I want as much as possible so I don't have to worry about limits.

Everyone is different.

You spend $200 on groceries and we spend over $1000.

[NRB525]

Thanks for explaining your strategy. 

[Brian_Earl_Spilner]

Your biggest pushbacks on here will be

1. People want high limits to cover any kind of emergency

2. If forced to carry a large balance, it doesn't affect uti too much to do so

3. I do it cause I wanna

[AverageJoesCredit]

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@Shooting-For-800 wrote:

Different strokes for different folks.

For me, I want as much as possible so I don't have to worry about limits.

Everyone is different.

You spend $200 on groceries and we spend over $1000.

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Nice SUB😁

[longtimelurker]

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@Shooting-For-800 wrote:

Different strokes for different folks.

For me, I want as much as possible so I don't have to worry about limits.

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But when would you think "OK, with that last round of CLI/new cards, I have enough, don't have to worry about limits anymore!"   My guess is "Never"!

[Citylights18]

When it comes to credit limit more is always better. But I will say my focal point is generally tactical when picking up cards.

For instance I picked up Citi Rewards+ this morning because it was the right fit for where my travel is heading. I'm snarfing TYP while my Chase points have been just sitting around.

I like good balance transfer cards. To most people balance transfers are just for those in debt but I sware by them as effective financial tools.

[simplynoir]

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@longtimelurker wrote:

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@Shooting-For-800 wrote:

Different strokes for different folks.

For me, I want as much as possible so I don't have to worry about limits.

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But when would you think "OK, with that last round of CLI/new cards, I have enough, don't have to worry about limits anymore!"   My guess is "Never"!

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To me this is an okay attitude to have as long as one is aware of two main things. One being that the rug can be pulled from underneath them at any time when talking limits that don't get used aka closures and CLDs. Nothing worse than a bank reducing a limit that hasn't been used in a few years because you wanted it "just in case" or "but my utilization!" Silly banks aren't thinking about me at all!

Second point is that banks sometimes ask for something some are not willing to give when asking for increases to their limits. You know what I'm talking about. Yeah, something that apparently I wouldn't ask my SO and would rather give up my next unborn child than acquiesce to. Yep, I'm talking about income verification. Pay stubs, bank statements, even tax forms are off the table and how dare they ask me in the first place!!! 😤

[tcbofade]

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@Brian_Earl_Spilner wrote:

Your biggest pushbacks on here will be

1. People want high limits to cover any kind of emergency

2. If forced to carry a large balance, it doesn't affect uti too much to do so

3. I do it cause I wanna

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I'll bite.  I'm guilty of all three, but I'm not pushing back a bit.  We're all different.

I've got nearly $500k in open revolving lines, DW has nearly $400k.  We like free money and like to keep our utilization down.

To each their own tho!

[AndySoCal]

@Shooting-For-800 

From your siggy you have a Walmart card that would come close to handling the grocery. If it were me I would prefer the credit limt to be less than 10 % of my usual monthly spending. That said you other cards that could do that with out a problem.