How much does monthly spend matter

[Anonymous]

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@Aim_High wrote:

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@Kforce wrote:

Ironically, I think my PIF strategy (and paying multiple times per month before statement cut) has worked against me in some respects. 

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Yes your $440,000 worth of credit lines shows PIF and paying multiple times per month is not working !

Maybe it is related to how much available credit you have that is making new apps start at a lower limit.

Cutting all your cards to 20k, and getting rid of 10 cards might make a new card start at 20k. (Just a joke)

Just trying to show that there are a lot of factors issuers use, and different views of what they look at.

I do believe PIF and paying multiple times per month hurts if one is on a mission to maximize CL's. 

At the same time I believe nice CL's can be received with minimum spend, PIF and paying multiple times per month. (My own history with CC's)

Is it necessary or smart to maximize CL's is my question ?

It is one of the most sought after things on the Myfico forum and I have no understanding of why.

I cap all my cards at a level that is conservative for my income, credit scores and spend.

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You sort of missed my point.  Some lenders value my high credit score, thick file, and high income and give me starting limits that fall in the middle of the pack relative to my other scores.  Then, other lenders give me limits that, compared to approvals posted my My Fico with profiles that may not be as strong as mine in some respects, have given me lower Starting Limits that surprised me.  So yes, my TCL of $440K coupled with low posted monthly utilization is the factor that I most recently have identified as to why some lenders are more generous with other applicants based on other factors.  I found that noteworthy and wanted to tell others about my experience.  And yes, I'm (partially) on a mission to raise my credit limits, so that bolded sentence above applies.  

Yes, high credit limits are a focus for many of us.  If you like your conservative limits, there's nothing wrong with that.  We all have our preferences and there is plenty of room for different schools of thought on My Fico.   As I have often pointed out, there is a LOT of background information and data points about other members that we don't see or understand, so comparing different profiles, lifestyles, and circumstances can be a pointless exercise.  I have several reasons for wanting to increase my limits as high as possible and I'm sure they are similar to many other My Fico members.  I'll try to explain some of my thought processes.

First, utilization padding.  As I've worked on my credit, I have become increasingly aware of how much utilization is used to evaluate credit profiles, and I think the impact is much too exaggerated from the FICO standpoint.  They give you "x" amount of credit to use, because that is what they think you can successfully manage, but then FICO lowers your score (uses it against you) if you run up balances, even though they know very little about your complete financial picture.   Very frustrating!!  So playing the game, utilization padding helps you to have a credit line of $20,000 meaning you can actually USE only $2,000 (about 10%) of it without sweating what you're doing to your score.  I'll never need or use even 1/10th of my credit lines, but it's nice to have them high for that very reason.  

Second, one of my credit score services mentioned that even though I had a very high FICO, that one factor holding me back from even higher was that my highest credit limit was lower than other people with similar scores.  Hmmmm..... So that got me to investigating and learning how to increase credit limits even higher.  I learned that it was true: my limits WERE lower.  I hadn't been pushing lenders to give me the higher limits and once I got more pushy, they quickly obliged.  In turn, my credit scores did go up somewhat higher.  And I've learned that even my relatively high limits are not nearly as high as many other people, thanks to My Fico.

Three, my household disposable income has risen significantly in recent years, and we are able to afford higher spending.  Even though we don't do it normally, it's nice to know if we want to splurge on a special vacation or other indulgence, that our credit limits will be there to support it safely.  High credit limits are no longer a danger.

Four, I'm at a point in my life where I have high credit scores and high income, so I'm in the driver's seat more than I've ever been in my life regarding my credit accounts.  It's fun to see how high I can drive my limits.  I'm a few years away from retirement where it may be more difficult to increase my limits once my income drops, so I'd like to push my available credit as high as I can now which will give me more options in the future.   Inflation will have a moderating effect on those high limits as I slip further into retirement. 

Which brings up Five.  I have enough decades of managing my credit that I trust my ability to handle high credit lines without screwing it up.  I wouldn't recommend just anyone do what I and others have done.  It's very risky for someone who is not disciplined and careful about their credit habits.  

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I try to pad my lines so when I have a heavy spend month, my scores won't go down too much. It's not like I can't afford to temporarily lose points, but I may use a 0% offer, and my scores won't suffer too much. I think its ridiculous that if I max out a card, I lose a ton of points, when my overall util is around 6%. It shouldn't matter how the balance is spread around. 6% is 6% to a new or existing lender. The risk is the same to me in my opinion. The only lender who incurs a higher risk is the lender who is holding the balance of the maxed out card, because if something goes wrong and I can't pay, that lender will take the biggest hit. Makes sense to me.

But I don't sweat over it. I don't find it to be a lot of work to request a CLI. I get it or I get denied. No big deal.

[recoveringfrombk7]

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@AverageJoesCredit wrote:
Its easy for someone with high income,established credit and high credit limits to look down at those chasing cli but in the end everyone here on this forum has their own reasons for doing so. We need to remember no matter how good ones credit is , a credit limit can be taken away in a blink of an eye and simple mistakes or life altering ones can affect ones credit in an instant. I believe usage always plays a part in determining ones credit increase ability but as always stated, alot of other factors involved. Each bank has their own criteria. If one really wants more credit with a lender use their card and use it responsibly

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One of the things I encountered here was a bit of push back for how many cards I had applied for following bankruptcy because you only need XYZ to rebuild your score.  But, after spending most of my adult life making less than 30k in the northeast US and raising a kid the fact that I had only 3k in limits freaked me out.  Though my income is much higher now I still have a mortgage and 6 figure student loan debt, so my take home is improved, but I am still only managing to save about 150/paycheck and I feel blessed to be able to do it.  Poverty leaves you with a lingering PTSD with regard to finances.  When I was still on my old income and my car died or we needed food the same pay cycle that insurance was due I was in a constant state of stress.  Credit cards made it possible for me to eat and feed and clothe my kid.  I've recently run into a bunch of life events (car problems, heater broken at home in the middle of winter) that left me freaking out (3k ish over 3 months).  I used credit for some and then paid it back very shortly after this time, but any unexpected expense over $500 terrifies me still and my husband has to remind me that things are better.  When I started my current job I had less than $20 and no room left on any of my credit cards (hence the bk).  For that reason I really did need to get my limits as high as I could.  Not to misuse the credit with crap I do not need, but just to breathe.  Everyone has their reasons.  I don't think there are wrong ones under most circumstances.

[Anonymous]

Is it just me, or is Synch about the fastest comapny for increasing cl with use?  I needed a new p.a. system for our old fart's rock and roll band.  Something lightweight, loud, and easy to move.  I had not sought any credit for years and years, preferring to pay cash for all transactions.  But, I didn't have cash for a new p.a., and so got a Sweetwater, and Musician's Friend cards.  Bought the system through several companies at 0% interest.  The limits they gave me were quite low and utilization was way over 50%, so I called them after a few months, and requested a cli, which they gladly obliged.  MF they increase 4X, and Sweetwater added $1500.  Feeling greedy, I then requested a Paypal MC, and they gave me one of those, too.  Dropped my utilization down to 20% and will slowly drop from there (hey, it's 0%, no need to rush it).  Really feeling some Synch love, just wish Cap1 would increase like this, as well.

[Nomad3]

This has been a good read. Lots of informations. I never got a credit card when I was younger because I was afraid of them. Always paying with debit and unknowingly suffering from a thin file. I couldn't afford big things, and had to ask my parents for help with car trouble once. So now that I understand credit and started getting into it I've actually lowered my insurance premiums and established breathing room that I never knew how much I would benefit from. Since beginning my credit journey last year I've reduced my car insurance premiums by almost $1k/year, and all that changed was my credit score(actually increased my coverage$ and my premiums still plummeted). My limits are still very low and I'm micro'ing my score as best I can.

PIF and artificially keeping my posted balance at 8% got me to 764, but I'm pretty sure the low balances hurt my new card limits when approved. I've been cycling my Cap1 limit and they've given me auto love sooner than the 6mo wait period between increases. Going to try letting 28% post for awhile, PIF, and see how my CLI's go with the new cards I just got.

Mortgage on the horizon, not sure if CL factors into that, but it would be nice to be able to float things I will need for the house when that time comes without a "store card" or "store financing" (e.g. Fridge/etc).

Definitely the most frustrating part is having to wait to build history

[JNA1]

All of the data points, strategies, opinions, and experience on this site is awesome! At my age, I honestly feel foolish for just now learning how the credit game is played. I walked around for a couple of decades proud and braggin’ about the fact that I didn’t need or have to use credit to buy anything we needed besides our mortgage and a couple of cars/trucks. Anything $10 - $15K was no sweat for me and when something broke, or we wanted something new, or took multiple vacations a year - I went to my CU and pulled out a chunk of my cash just paid for it.
I shudder to think about about the thousands of dollars I could have earned in Cashback and score I could have now if I had doing this for years. Ignorance is bliss, right? 🙈😂

As someone mentioned above, I’m building my profile for a better financial life not only for now, but after the kids are out of the house, and later on, retirement. I’m technically still not really using credit. I haven’t bought one thing since I got my first card nearly 2 years ago that I didn’t have the money to buy, but going forward, I’m not going to buy anything I buy that I can use a card for with cash. I do plan on maybe investing some of my savings in higher yield accounts and actually using some of my credit, instead of always pulling big chunks out like I’ve always done.
So far this has been an exciting journey!

[Anonymous]

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@JNA1 wrote:
All of the data points, strategies, opinions, and experience on this site is awesome! At my age, I honestly feel foolish for just now learning how the credit game is played. I walked around for a couple of decades proud and braggin’ about the fact that I didn’t need or have to use credit to buy anything we needed besides our mortgage and a couple of cars/trucks. Anything $10 - $15K was no sweat for me and when something broke, or we wanted something new, or took multiple vacations a year - I went to my CU and pulled out a chunk of my cash just paid for it.
I shudder to think about about the thousands of dollars I could have earned in Cashback and score I could have now if I had doing this for years. Ignorance is bliss, right? 🙈😂

As someone mentioned above, I’m building my profile for a better financial life not only for now, but after the kids are out of the house, and later on, retirement. I’m technically still not really using credit. I haven’t bought one thing since I got my first card nearly 2 years ago that I didn’t have the money to buy, but going forward, I’m not going to buy anything I buy that I can use a card for with cash. I do plan on maybe investing some of my savings in higher yield accounts and actually using some of my credit, instead of always pulling big chunks out like I’ve always done.
So far this has been an exciting journey!

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A long time ago i used to think using credit cards meant that you didn't have enough money to pay your bills. I was dating someone back in 2001 and we went to a grocery store and she paid with a credit card. I asked her if she was having some financial trouble. She said no, but earns points for using the card.  I said paying interest on groceries isn't smart. She said she PIF and doesn't need to get cash from the bank. From that discussion forward, I thought it was a great idea and decided to pay as much with credit cards as possible. 

Rewards aside, it's a very convenient way to pay. No more ATM trips,  and when you go on vacation, you don't have to guess how much cash you'll need. $1,000, 2K, 4K. You might withdraw too little or too much. That problem goes away.

Add rewards, and you're getting paid to use something that's already very convenient. 

Cards can be strictly a method of payment, and not an expensive loan.

[Aim_High]

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@Anonymous wrote:

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I was dating someone back in 2001 and we went to a grocery store and she paid with a credit card. I asked her if she was having some financial trouble. She said no, but earns points for using the card.  I said paying interest on groceries isn't smart. She said she PIF and doesn't need to get cash from the bank.

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I hope you married that girl.

She's a smart cookie. 

[Anonymous]

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@Aim_High wrote:

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@Anonymous wrote:

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I was dating someone back in 2001 and we went to a grocery store and she paid with a credit card. I asked her if she was having some financial trouble. She said no, but earns points for using the card.  I said paying interest on groceries isn't smart. She said she PIF and doesn't need to get cash from the bank.

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I hope you married that girl.

She's a smart cookie. 

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Didn't happen. She only did it because it was forced on her by her ex husband. But afterward, she kept it up because it was so convenient to pay that way.

[MacCreed]

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@Kforce wrote:

Is it necessary or smart to maximize CL's is my question ?

It is one of the most sought after things on the Myfico forum and I have no understanding of why.

I cap all my cards at a level that is conservative for my income, credit scores and spend.

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I thought I was the only one who thinks chasing credit limit was like a competitive sport here!  

I chalk it up to every forum has its quirk and this is the quirk of this one. 

[CreditInspired]

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@recoveringfrombk7 wrote:
From my personal experience I would add Discover. I started with a secured card after ch7 discharge (Discover not IIB) at 500, over time (500 at a time) I maxed it to 2500$. Used it as my daily driver for a year, running up to $2200/mo through it, always paying in full every paycheck. Card still hasn't graduated, but at the 1 year mark I prequalified unsecured and ended up with a $14,500 SL*. Seems outrageous with a BK 14 months post discharge, but I think my income + 1 year of heavy use relative to CL is what made that happen.

*I had to call in after sending my DL because we had recently moved. My husband sitting across from me nearly choked on his breakfast when he heard the limit. 😂

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Wow! That's quite impressive. I'm reading this and nearly choked drinking my coffee. 😆 Kudos to you!