Interested in potentially apping for more CU cards, but worried about denials due to high total CL?

[galahad15]

Hi, in the near-future, I will be paying a huge chunk of my existing revolving debt off (about somewhere between 85% - 90% or thereabouts), at which time I am very interested in potentially apping for a few more CU cards that I think are truly exceptional.  I had previously apped for these cards about 1 - 1.5 years ago but was denied, for 2 main reasons:  total outstanding revolving debt was too high; and total available credit limit was too high (or similar language).

While after I will have paid off the large chunk of the revolving debt which will solve the first problem, my total available CL across all cards is approximately $500k, so do you think the CUs that denied me before due to the 2 reasons listed above will still continue to deny me for having an excessive total CL across all cards, even once the revolving debt has been paid?  Or should I consider or possibly think about intentionally requesting CLD on some cards, in order to free up some total CL space for other approvals, etc.?  Thanks in advance for reading and for your time! 

[Anonymous]

The worst thing you can do is close or reduce CL's on existing cards just to take out new cards which will lower your age of accounts. And there is no guarantee that you will be approved for the new cards or with CL's that you would like.

Have you thought about just going for CLI's on existing older cards? and go with the banks that just do a SP so there is no inquiry?

I went through that stage at $750K, while I do have a lot of new cards and a bunch of CLI's too I would never close any of my existing cards nor go for a decrease in CLI's. My only account that is a CU is Pen Fed. All my other accounts are at banks so I cant advise you on that. Pen Fed did open me two new cards this year with pretty decent CL's  but nothing like what you are looking for.

Just so you can compare your profile and see what is similar to mine:

Most of my FICO's are in the low 780's

Total CC lines open $1,103,000

Age of credit, some of my cards are 42 years old

Income just over 1M

Total open credit cards 74

I hope this helps

Thanks

Mark

[longtimelurker]

It's always hard to tell from the reasons, the first, which will go away, may have been 99% of the reason for the denial, in which case you could be good, or it could have been 50%, and then the remaining reason would be a continuing roadblock.

Certainly some CUs really are sensitive to total available credit, much more so than banks.   I would probably apply again before doing CLDs as a) you might be OK as is, and b) it's hard to tell how much CLD would be enough, and having to do too much might make it not worth it

[NRB525]

Is your siggy accurate with $85k limit at FNBO? That one alone might raise some eyebrows

Has your overall strategy changed, regarding low APR to now emphasize  rewards? If that's the case then lowering CL, and even closing cards with no rewards could be considered.  

Congrats on getting to $500k

Now to try for a higher overall rewards?

[galahad15]

Thanks to everyone who replied for your comments and feedback, greatly appreciate your input! 

[galahad15]

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@NRB525 wrote:

Is your siggy accurate with $85k limit at FNBO? That one alone might raise some eyebrows

Has your overall strategy changed, regarding low APR to now emphasize  rewards? If that's the case then lowering CL, and even closing cards with no rewards could be considered.  

Congrats on getting to $500k

Now to try for a higher overall rewards?

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Thank you for the kind comments! 

In response to your questions:  yes the $85k CL for my FNBO Amex card is accurate - I ended up transferring or moving the CL of $25k from my former FNBO Travelite Amex when they ended the Travelite card program, and so what was once a $60k CL on my FNBO Amex then became $85k  

On APRs vs. rewards, I think that I may have (hopefully?) hit the sweet spot on that, for the most part, between 3% AOD card on all purchases, plus the various other low-APR cards with rewards.  The high-APR cards with excellent rewards such as the Cash+ cards, the Citi Custom Cash, and the WF Propel are PIF monthly, allowing me to mazimize the rewards with no interest charges.  

The cards I was actually interested in apping for are fixed-rate, low-APR cards, such as the 6.90% F, 7.90% F, and 8.90% F cards from DCECU, as well as the 8.00% F card from Garden Savings FCU.  All of the above turned me down when I apped for them 1 - 1.5 years ago, for the reasons mentioned of high revolving debt plus excessively-high total CL across all cards.  My primary interest in apping for them is to lock down as many fixed-APR cards below 10% F as possible, especially since inflation will most likely drive up interest rates for new customers, even on fixed-rate cards, up soon in the near-future.  I already have 6 fixed-rate cards below 10% F, so I would ideally love to add more to the collection lol, before inflation starts roaring its ugly head and the existing rates no longer become viable 

I'm also potentially interested in asking my existing BEFCU and Dover FCU cards if (once my revolving debt is paid off) if they could possibly consider giving me the lowest-available, fixed-rate APRs on the cards, assuming that I can hopefully qualify (i.e., 4.99% F and 5.99% F, respectively), and maybe see if they might be willing to throw in a few CLIs to those cards as well.  My #1 favorite card is my currently my BEFCU VISA, but for it to be more usable, I need to be able to get it above the present $4k CL, etc.

Thanks again for all of the generous compliments, again I greatly appreciate it! 

[coldfusion]

It's already established that some issuers will deny credit because the existing unsecured credit from other issuers excceeds their threshold.

Since the 2 CUs you listed aren't all that big (Garden State is pretty small)  there probably aren't many related data points but it isn't unreasonable to assume they would deny you again for the same reason if you applied.

This is entirely speculative on my part but It wouldn't surprise me if you would have to significantly slash your aggregate CL (as in like the order of 50%) in order to get approvals from either of these CUs.

You could of course choose to risk an inquiry and apply for one of the cards; if denied request a reconsideration and follow up with asking questions along the line of what actions you could take to possibly get a more positive response in the future.

[Aim_High]

In many cases, I believe that cutting existing credit limits is unnecessary for new approvals.  Yes, credit unions in general may be more sensitive to high limits, but the key factor for me missing in this discussion so far is how those limits fit into the overall financial picture.  So the amount of someone's Total Credit Limit is relative.  Saying "Are my TCLs of $100K ...  $500K ... $1 Million ... too much" can't be answered out-of-context since the it depends on total income, other debts beyond that revolving card debt, and assets on account with the lenders where you apply.  Plus, of course, it also depends on the sensitivity of each lender to TCL and calculations of debt-to-income ratios. 

Even though your lenders previously questioned those issues, you won't know for sure until you reapply if paying off the debt was sufficient or if TCLs are still out-of-proportion to overall finances.  

If total credit limits are $500K with $50K income, that's a 10x multiple of income:CL.  If income is $1M, that's only 0.5x income.  Some people buy a home at the top end of their budget and are house-poor while others may own their home and have no mortgage.  While those are extreme examples, approvals for credit and the amount of approvals come down to a lender's projection of your ability to repay and the risk they are willing to accept.

[BearsCubsOtters]

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@galahad15 wrote:

Hi, in the near-future, I will be paying a huge chunk of my existing revolving debt off (about somewhere between 85% - 90% or thereabouts), at which time I am very interested in potentially apping for a few more CU cards that I think are truly exceptional.  I had previously apped for these cards about 1 - 1.5 years ago but was denied, for 2 main reasons:  total outstanding revolving debt was too high; and total available credit limit was too high (or similar language).

While after I will have paid off the large chunk of the revolving debt which will solve the first problem, my total available CL across all cards is approximately $500k, so do you think the CUs that denied me before due to the 2 reasons listed above will still continue to deny me for having an excessive total CL across all cards, even once the revolving debt has been paid?  Or should I consider or possibly think about intentionally requesting CLD on some cards, in order to free up some total CL space for other approvals, etc.?  Thanks in advance for reading and for your time! 

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I absolutely love your posts. Partially because your emojicon and user name remind me of Prince Charming from Shrek LOL and also because I love how hyper-focused you are on low APRs-almost the exact opposite of most people here (they are mostly interested in high credit lines and rewards).

I agree with everybody else in that you would not want nor need to reduce credit lines proactively.  I believe the best chance for approval will be having little debt at the time of application. If, with lower debt, they still come back with the excuse that you hold too much available credit, you could always try contacting them to let them know that you are eventually closing some cards but did not want to do that until you were approved. And if worse comes to worse, the BB&T and Amtrak cards could easily go away. 

Keep in mind that even fixed APRs can change. I would imagine that once the Fed raises rates (wondering if that will ever happen) the banks and even credit unions may change in terms to a higher floor rate to help their bottom line. 

Also, where is your GM Buypower card? Does it's portrait style affect your signature? 

Caffeine has been my friend today if you cannot tell. 

[Gollum]

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@galahad15 wrote:

Hi, in the near-future, I will be paying a huge chunk of my existing revolving debt off (about somewhere between 85% - 90% or thereabouts), at which time I am very interested in potentially apping for a few more CU cards that I think are truly exceptional.  I had previously apped for these cards about 1 - 1.5 years ago but was denied, for 2 main reasons:  total outstanding revolving debt was too high; and total available credit limit was too high (or similar language).

While after I will have paid off the large chunk of the revolving debt which will solve the first problem, my total available CL across all cards is approximately $500k, so do you think the CUs that denied me before due to the 2 reasons listed above will still continue to deny me for having an excessive total CL across all cards, even once the revolving debt has been paid?  Or should I consider or possibly think about intentionally requesting CLD on some cards, in order to free up some total CL space for other approvals, etc.?  Thanks in advance for reading and for your time! 

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I "only" have five credit cards so our credit card strategies are different. I am not familiar with the two credit unions that turned down your applications. As you probably know, credit unions are owned by their members, so some credit unions are able to offer lower rates to their members because of a relatively lower cost of business compared to commercial banks.

I noticed a couple months ago that the NFCU credit union (apparently one of the largest credit unions) was no longer accepting applications for HELOCs. This suggests to me that NFCU is trying to decrease its risks regarding lending.

If the two credit unions that interest(ed) you are smallish credit unions, I would not expect whoever makes the decisions at those credit unions to change their minds in regard to your future/ostensible (or even accomplished) decrease in balance owed. You would still have the total credit limit available problem/whatever that they already cited previously.