How can you tell when the limits are too high?

[Anonymous]

Perhaps the big limits are too easy once you hit 700 or so.  I am trying to be very careful, and am surprised to see CL totalling over one's annual income.  Don't want to find myself in that position ever again.  After no credit for 6+ years I finally got a secured credit card.  Put $40 on the stupid thing, then could not sleep.  Finally got up in the middle of the night and paid it 3 days after it hit the card.  Probably a little more sane now, but want to milk the creditors for free goodies the way they ripped me for 30 years.  Sorry for the rant.  We travel most of the time on limited money mostly out of the country so those points and miles help us stretch the money.

Current Scores:
MyFico 9/14 EQ 748, TU 702, EXP 685
EQ neg-0, TU neg 60 day late 1 time, EX 3 CA from 2008

History

      Cap One    Karma  Sesame Credit.com
3/14 Exp 620
5/14 Exp 634 Exp 659
6/14 Exp 634 Exp 661
7/14 Exp 634 Exp 662
8/14 TU 614 TU 647 EXP 667 Exp 684
9/14 TU 647 TU 656 EXP 684 Exp 796

Wallet----Cap One Sec Card 800 CL,  Amazon Card 1,700 CL,   Sam's Master Card 3,500 CL

Debt Load----<600 always paid off monthly.

[12njoy]

It's all about discipline.  After having no credit cards from 2005-20012 when I got my first secured, I went on an app spree that I couldn't and still can't believe.  I've found myself paying credit cards twice whereas I have credit balances.  I'm a little paranoid too.

[Anonymous]

Thanks.  Quite an array.  New rule----"He who dies with the biggest credit line wins."  I wonder if as many banks and financial entities have blackballed me as I have blackballed them.  I learned in the last six years, I didn't need any of them, but they can be convenient.  Now, no debt, no mortgage. I could live fine without a car if I had to.  I would just cruise all the time.  3% utilization of 225000 is more than I want on my back at about 7k., I get nervous at $500.

[b_diddy]

IMO, it's mostly about how you use the cards rather than your total available credit.  Lenders will usually see this differently.  Available credit beyond 3x annual income is the range where I would get nervous.

[12njoy]

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@Anonymous wrote:

Thanks.  Quite an array.  New rule----"He who dies with the biggest credit line wins."  I wonder if as many banks and financial entities have blackballed me as I have blackballed them.  I learned in the last six years, I didn't need any of them, but they can be convenient.  Now, no debt, no mortgage. I could live fine without a car if I had to.  I would just cruise all the time.  3% utilization of 225000 is more than I want on my back at about 7k., I get nervous at $500.

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Agreed.  I have 17k in savings and I use this to pay it down over time.  I had 14k in debt.  Since I've just come with all this new credit beginning in July 2013, I need to establish a good payment history.  I was paying in full on everythng.

[HiLine]

There is not such a thing as too high limits as long as you do not let the limits affect your consumer behavior. I would recommend setting up automatic payments that pay statement balances in full the day after the statement comes out. That way the money comes out of the bank account not long after you make the purchases, and thus there is less capacity for overspending.

If you have had problems managing credit card purchases in the past, I would suggest limiting the limits to the range with which you are comfortable. Set a ceiling for total limits of, say, 10k, and whenever you get approved for new credit that may make your entire card portfolio top over the ceiling, voluntarily reduce the limits on your cards to keep things in check.

[Anonymous]

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@HiLine wrote:

There is not such a thing as too high limits as long as you do not let the limits affect your consumer behavior. I would recommend setting up automatic payments that pay statement balances in full the day after the statement comes out. That way the money comes out of the bank account not long after you make the purchases, and thus there is less capacity for overspending.

If you have had problems managing credit card purchases in the past, I would suggest limiting the limits to the range with which you are comfortable. Set a ceiling for total limits of, say, 10k, and whenever you get approved for new credit that may make your entire card portfolio top over the ceiling, voluntarily reduce the limits on your cards to keep things in check.

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Well, issuers have limits on how much they are willing to be exposed to you, so too high limits may prevent you getting a new card that you really want.  With some issuers, you can move limits around, or PC (potentially losing a bonus), others not.  So there is such a thing as too high limits!   And as the limits get larger, even new issuers may become more reluctant to lend.

[vanillabean]

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@Anonymous wrote:

Well, issuers have limits on how much they are willing to be exposed to you, so too high limits may prevent you getting a new card that you really want.  With some issuers, you can move limits around, or PC (potentially losing a bonus), others not.  So there is such a thing as too high limits!

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I wonder what customer service would say when adressing this. Chances are they won't flat out say how much room you have left for another card. On the other hand you of course aren't interested in wasting a hard inquiry for nothing, not to mention several if you are close and if they need a second agency to be sure.

[nightglider]

I'd say your limits are too high when they prevent you from getting credit/loans you actually need. My current total limit is about $15k beyond my salary and I'll probably be asking for more, simply because I can (and because the majority of that is my Amex which I don't really use anymore). If my spending habits change, and I get denied for a card I would get better use from due to too high available credit, I'll lower some limits.

[s_haliz]

I had read comments here. I have a slight different opinion. For those who argued that there must be a set maximum amount (total CL)  in lender's mind that beyond which lender would not extend CC.

Let's assume for a moment it is true (I don't believe it is true). So person A applies to CC lender X. He/she has total available credit of say $120,000. Based on the information submitted, lender calculates that this person should be maxing out at $130,000 total CL, so approve him/her for just $10,000 CL on newly approved card. Person A is savvy and app spree determined. He/she does apply say 3 more cards and extends his/her limit by yet aonther $35,000 between these three new cards. Few days later he gets his AMEX increase of $15,000. Now his total CL is $180,000. About $50,000 beyond what lender X's max limit. Do you think lender will cancel his card now that he became too risky? I don't think so....    

Eventhough high overall CL may have some impact, I strongly believe its the utilization, your oldest CC with highest limit, thickness of your file and your income to the extent plays major role. There is no such thing as "high limit". Its all relative.