Is this right? Higher limits are bad for you?

[toppers555]

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@kevinjjc wrote:
Which forum?

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MyFico forum raid? JK

[Bay_Area_Joe]

I don't know everything by any means, but I have a lot of availible credit and low debt, and credit card companies don't seem to have any issue with it, and in fact I seem to get auto CLI's.

My scores are great, and whatever I am doing is working well.

J

[enharu]

In most cases, higher limits are NOT a bad thing.

There are a few scenarios where high limits can be a bad thing however.

1. People with absolutely zero self control of finance management skills. People in this category ought to steer clear of debt entirely, or simply limit how much they can borrow. 

2. People with limited income. High limits and low income can sometimes be a bad combination, especially for people with not-so-established credit history. It may make other lenders wary about issuing anymore credit or loans. YMMV situation on this.

3. People with high limits on nonsensical cards can end up "hurting" them instead. Their income starts to become a limiting factor simply because of the amount of credit they have on those (almost) useless cards, and because of that, they're denied of credit on cards that are actually much better for them.

[pinipig523]

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@toppers555 wrote:

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@kevinjjc wrote:
Which forum?

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MyFico forum raid? JK

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LOL!!!

[CreditScholar]

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@enharu wrote:

In most cases, higher limits are NOT a bad thing.

There are a few scenarios where high limits can be a bad thing however.

1. People with absolutely zero self control of finance management skills. People in this category ought to steer clear of debt entirely, or simply limit how much they can borrow. 

2. People with limited income. High limits and low income can sometimes be a bad combination, especially for people with not-so-established credit history. It may make other lenders wary about issuing anymore credit or loans. YMMV situation on this.

3. People with high limits on nonsensical cards can end up "hurting" them instead. Their income starts to become a limiting factor simply because of the amount of credit they have on those (almost) useless cards, and because of that, they're denied of credit on cards that are actually much better for them.

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+1. Some great advice here.

[Steelersboy]

higher limits=lower utilization (if not carrying high balances)

[TheConductor]

This kind of wrong-headedness couched in the stubborn belief of being right demonstrates what I have long insisted: Credit Management should be a standard 1-semester class in every high school currciulum.

[Kratos-TM]

Let's talk about this in terms of a lender........he/she sees that you have 100K worth of credit but you're not using it (accounts zero'd out). Does this lender say, "this guy really manages his credit well, or this guy has too much potential for trouble?"

To me, if you've had these cards for "years" and they're still at 0, then that should be a big POSITIVE towards you, but a lender might see that differently.....

Let's look at the opposite......you have a very high income and your available credit is very low.......does the lender say to himself, "no one trusts this guy with credit, or this guy is very cautious about seeking credit"....?

At what point is available credit a positive for the applicant.........???

[frugalQ]

Just having higher limits is not bad for you. However, how you utilize those limits is what can make a bad situation.

[longtimelurker]

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@frugalQ wrote:
Just having higher limits is not bad for you. However, how you utilize those limits is what can make a bad situation.

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Well, a post from today showing it can be "bad" without using them.

http://ficoforums.myfico.com/t5/Credit-Cards/Barclay-closed-my-account/td-p/2411411

Barclays closed the card because the poster had too much available credit.