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Good "Rule of Thumb" for TOTAL CLs?

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Dw4250
Valued Contributor

Good "Rule of Thumb" for TOTAL CLs?

I know this is a really broad question that's probably been asked on here before, but is there a good rule of thumb for total 'advisable' CLs based on income and other factors?  I am thinking something comparable to 28/36 DTI ratio rule used widely by mortgage lenders.  Does DTI factor into the CL "ceiling" for credit cards?  

 

I know each CCC has their own threshold, but I'm wondering if anyone has noticed a pattern, either personally or based on the experience of others.  For example, for someone making 50K/year, would 50% of that number ($25K in TCLs) be considered "too high"?  

 

There seems to be quite a number of people on here with >$100K or even $200K+ in total CLs.  Are these people with very high incomes and/or business owners who require large CLs?  Or just average joes/janes with excellent credit management skills?

 

The reason I'm asking is while gardening, I've already received a couple of SP CLI, and would like to keep pursuing this strategy for obvious reasons.  Even though I PIF every month, as time goes on I do not want to reach a point where my available credit is so high as to draw red flags from either CCC or other creditors (i.e. mortgage lenders).

 

I currently have ~ $35K in total credit lines (~1% reported UTL), and my income is $83K.  My goal is to get total CL to around $50-60K.  Would that be too high?

 

Any thoughts?

Message 1 of 20
19 REPLIES 19
clocktick
Valued Contributor

Re: Good "Rule of Thumb" for TOTAL CLs?

Many many people have limits that exceed their salary.

 

I know in some cases, an application will give a rejection with something like, "too much available credit."

 

Others don't seem to have this issue.

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Message 2 of 20
longtimelurker
Epic Contributor

Re: Good "Rule of Thumb" for TOTAL CLs?


@Dw4250 wrote:

I know this is a really broad question that's probably been asked on here before, but is there a good rule of thumb for total 'advisable' CLs based on income and other factors?  I am thinking something comparable to 28/36 DTI ratio rule used widely by mortgage lenders.  Does DTI factor into the CL "ceiling" for credit cards?  

 

I know each CCC has their own threshold, but I'm wondering if anyone has noticed a pattern, either personally or based on the experience of others.  For example, for someone making 50K/year, would 50% of that number ($25K in TCLs) be considered "too high"?  

 

There seems to be quite a number of people on here with >$100K or even $200K+ in total CLs.  Are these people with very high incomes and/or business owners who require large CLs?  Or just average joes/janes with excellent credit management skills?

 

The reason I'm asking is while gardening, I've already received a couple of SP CLI, and would like to keep pursuing this strategy for obvious reasons.  Even though I PIF every month, as time goes on I do not want to reach a point where my available credit is so high as to draw red flags from either CCC or other creditors (i.e. mortgage lenders).

 

I currently have ~ $35K in total credit lines (~1% reported UTL), and my income is $83K.  My goal is to get total CL to around $50-60K.  Would that be too high?

 

Any thoughts?


At lower levels of income, it's quite common to have 2 or 3x income as total CL.   As you earn more, that seems a little less common, possibly just because you need more CLs!   But  having 50-60K with $83K, IN THE ABSENCE OF OTHER FACTORS (such as multiple convictions for bank fraud!) shouldn't be an issue at all.

Message 3 of 20
Josh2942
Established Contributor

Re: Good "Rule of Thumb" for TOTAL CLs?

No it does not work like that. Each lender does their own risk based lending based off of their underwriting practices. People with 50K income that I know have Lowes cards that have 30K alone in CL. Not to mention their other CL's. I would probably beileve that a persons total CL's would hit a ceiling to all lenders if it is more then 2x there "reported income". No bank truly knows your income unless they are in your checking.

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Message 4 of 20
longtimelurker
Epic Contributor

Re: Good "Rule of Thumb" for TOTAL CLs?


@Josh2942 wrote:

No it does not work like that. Each lender does their own risk based lending based off of their underwriting practices. People with 50K income that I know have Lowes cards that have 30K alone in CL. Not to mention their other CL's. I would probably beileve that a persons total CL's would hit a ceiling to all lenders if it is more then 2x there "reported income". No bank truly knows your income unless they are in your checking.


Several people have more than 2x income.

Message 5 of 20
Dw4250
Valued Contributor

Re: Good "Rule of Thumb" for TOTAL CLs?


@longtimelurker wrote:


At lower levels of income, it's quite common to have 2 or 3x income as total CL.   As you earn more, that seems a little less common, possibly just because you need more CLs!   But  having 50-60K with $83K, IN THE ABSENCE OF OTHER FACTORS (such as multiple convictions for bank fraud!) shouldn't be an issue at all.


Oh yeah, I should have probably mentioned that little stint in Ft. leavenworth on those pesky fraud charges.  LOL!!!!

 

I am anticipating a decent raise sometime in 2015 (a promised promotion which should put me ~ $100-110K/year in income).  So do you think 80K-90K in TCL would be feasible?  

Message 6 of 20
Dw4250
Valued Contributor

Re: Good "Rule of Thumb" for TOTAL CLs?


@Josh2942 wrote:

No it does not work like that. Each lender does their own risk based lending based off of their underwriting practices. People with 50K income that I know have Lowes cards that have 30K alone in CL. Not to mention their other CL's. I would probably beileve that a persons total CL's would hit a ceiling to all lenders if it is more then 2x there "reported income". No bank truly knows your income unless they are in your checking.


Wow that's crazy...I know Lowe's is pretty generous with the CL's.  

 

While it's true they don't know your actual income, can't they have a general idea based on how much you put on your card balances/month?  I think this info is now available on our CR.

Message 7 of 20
lg8302ch
Senior Contributor

Re: Good "Rule of Thumb" for TOTAL CLs?


@Dw4250 wrote:

@longtimelurker wrote:


At lower levels of income, it's quite common to have 2 or 3x income as total CL.   As you earn more, that seems a little less common, possibly just because you need more CLs!   But  having 50-60K with $83K, IN THE ABSENCE OF OTHER FACTORS (such as multiple convictions for bank fraud!) shouldn't be an issue at all.


Oh yeah, I should have probably mentioned that little stint in Ft. leavenworth on those pesky fraud charges.  LOL!!!!

 

I am anticipating a decent raise sometime in 2015 (a promised promotion which should put me ~ $100-110K/year in income).  So do you think 80K-90K in TCL would be feasible?  


That is very well possible. I have half that income and over 100K in credit... I know this is way too much but I have no intention to use it all Smiley Happy

Message 8 of 20
Skye12329
Valued Contributor

Re: Good "Rule of Thumb" for TOTAL CLs?

I generally use the rule of income doesnt totally matter. When people apply for our card ive seen them enter 10k income and get approved for 10k. Ive also seen incomes of 100k be declined. And incomes of 300k be approved for 8k. So generally lenders dont give cl based on income however income is looked at if your in debt i know that. So if you make 100k and have 5k in debt they will wonder why. Also income doesnt totally matter when applying since its a computer that sees your information.
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Message 9 of 20
PlasticOrPlastic
Established Contributor

Re: Good "Rule of Thumb" for TOTAL CLs?

As crazy as it is there seems to be no "ceiling" per se.  My cousin is 24, works at the mall (about 16k a year) and has credit cards totaling well over 50k in available credit.  I've recently just gotten to 15k total on a 60K income...I'm more than happy with that, my highest before this point was literally about $1100 dollars (which is probably a good thing for back in those days)  I think its based on how well you handle the credit...I would like to see how easy it would be to set off a red flag for my cousin though, think one late payment might be devestating! 

Message 10 of 20
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