cancel
Showing results for 
Search instead for 
Did you mean: 

Total Credit Exposure Question

Under_Repairs
Valued Member

Total Credit Exposure Question

Do you guys have any issues with maintaining all of your credit card limits? I have a Care Credit card that had a $20,000 limit, and they just decreased it last month to $6k without any notice. I have a goal of opening up more cards to get my total credit exposure to over $200k, but since one issuer dropped my limit (probably due to low use) how can I ensure that as I open up new cards that doesn't continue to happen? Should I put small spending across all of my cards on a regular basis to maintain activity? I have seen many people on this board with a LOT of credit cards in their signatures with exposures well above $300k and I'm wondering how hard it is to manage all of those cards? Do others have high credit limits on cards they never use and it doesn't get decreased? Any insight on this, or how you manage all of your cards would be incredibly helpful.



Beginning of My Journey 10/2017 (3 yrs after filing Chp13 BK)


Bankruptcy Discharged on 12/4/2019 (FINALLY!!!)

Current FICO 8 Scores as of 12/7/2021

Current FICO 9 Scores as of 12/7/2021
10 REPLIES 10
K-in-Boston
Moderator

Re: Total Credit Exposure Question

Every issuer is different when it comes to how much use they expect and how much inactivity they will allow before closing a card or reducing a credit line.  Many credit unions will not touch limits and will allow cards to remain dormant for years.  Most of the major banks at one point or another have been known to reduce large credit lines when they are not utilized from time to time, sometimes this even happens to a large number of cardholders at once.  I've had store cards go 10 years before being closed for inactivity but also received a letter from FNBO on my China Airlines card that it may be closed for inactivity after only 6 months of non-use, and that card even has an annual fee!  If it's a card I want to keep or a credit limit I care about, I will make an effort to put some spend on there every 6-12 months.

Message 2 of 11
DJRobbieD
Contributor

Re: Total Credit Exposure Question


@Under_Repairs wrote:
Do you guys have any issues with maintaining all of your credit card limits? I have a Care Credit card that had a $20,000 limit, and they just decreased it last month to $6k without any notice. I have a goal of opening up more cards to get my total credit exposure to over $200k, but since one issuer dropped my limit (probably due to low use) how can I ensure that as I open up new cards that doesn't continue to happen? Should I put small spending across all of my cards on a regular basis to maintain activity? I have seen many people on this board with a LOT of credit cards in their signatures with exposures well above $300k and I'm wondering how hard it is to manage all of those cards? Do others have high credit limits on cards they never use and it doesn't get decreased? Any insight on this, or how you manage all of your cards would be incredibly helpful.

I no longer have exposure to Synchrony, but from what I've gathered from this forum is that they're aggressive in managing their outstanding exposure as a lender, often CLD and/or closing cards on people without notice (even with decent spend).  In regards to other lenders, it's often inactivity that leads to closures (but they usually send you letter before doing so), while CLDs usually happen if something negative pops up in your credit profile (e.g. new late payments/collections/etc).



***DPs as of 1/11/2022***
FICO 8: 810 (EX)
AoOA: 18.4 yrs, AAoA: 3.2 yrs
INQ (last 12m): EX 4 / EQ 1 / TU 0
New Accts: 3/30, 5/6, 7/12, 7/24
TCL: $284.4k, UTIL: 4-5%

In the garden until Feb 2024
Message 3 of 11
AverageJoesCredit
Mega Contributor

Re: Total Credit Exposure Question


@Under_Repairs wrote:
Do you guys have any issues with maintaining all of your credit card limits? I have a Care Credit card that had a $20,000 limit, and they just decreased it last month to $6k without any notice. I have a goal of opening up more cards to get my total credit exposure to over $200k, but since one issuer dropped my limit (probably due to low use) how can I ensure that as I open up new cards that doesn't continue to happen? Should I put small spending across all of my cards on a regular basis to maintain activity? I have seen many people on this board with a LOT of credit cards in their signatures with exposures well above $300k and I'm wondering how hard it is to manage all of those cards? Do others have high credit limits on cards they never use and it doesn't get decreased? Any insight on this, or how you manage all of your cards would be incredibly helpful.

You hit the nail on the head, show usage and know thy lenders.  

Message 4 of 11
longtimelurker
Epic Contributor

Re: Total Credit Exposure Question


@Under_Repairs wrote:
Do you guys have any issues with maintaining all of your credit card limits? I have a Care Credit card that had a $20,000 limit, and they just decreased it last month to $6k without any notice. I have a goal of opening up more cards to get my total credit exposure to over $200k, but since one issuer dropped my limit (probably due to low use) how can I ensure that as I open up new cards that doesn't continue to happen? Should I put small spending across all of my cards on a regular basis to maintain activity? I have seen many people on this board with a LOT of credit cards in their signatures with exposures well above $300k and I'm wondering how hard it is to manage all of those cards? Do others have high credit limits on cards they never use and it doesn't get decreased? Any insight on this, or how you manage all of your cards would be incredibly helpful.

Unless you have the organic spend to justify it, there is a cost to setting goals such as "TCL of $X"   First of all the time spent managing, and then the small but continual cost of putting little charges periodically on a number of cards, getting subpar rewards in most cases.    But on the upside, once  you achieve the goal you get, well, may be the fun of the chase!

 

As others have said, with well-chosen issuers, those that give fairly high CLs and don't mind a lot of neglect, you can reach the goal without too much backward movement.  Go all out with say Sync, and while you may do very well for a while, it can come crashing back as quickly.

Message 5 of 11
mark3038
Established Contributor

Re: Total Credit Exposure Question

You have to use all your cards or they will be subject to closure or CLD's as you found out.

I for one have what I would consider a lot of credit cards. They would all never fit in a signature or they would take up an entire page LOL

 

I manage all my cards by a steno book. I have all the cards listed in one book with the DUE date of each card and the amount due.

 

I have another steno book with the closing date for each card. Once it closes it goes back into use for a day or two then back to the portfolio for next month. And so on.

 

It is really easy to manage once you have your system in place.

With all of my cards I have never had a CLD or any AA due to non use.

If I can do it , anyone can do it but you have to be vigilant and never miss a payment to anyone

Thanks

Mark

Please note; My postings are my opinion only. You can accept them or reject them. Thanks, Mark
Message 6 of 11
Kforce
Valued Contributor

Re: Total Credit Exposure Question


@longtimelurker wrote:

Unless you have the organic spend to justify it, there is a cost to setting goals such as "TCL of $X"   First of all the time spent managing, and then the small but continual cost of putting little charges periodically on a number of cards, getting subpar rewards in most cases.    But on the upside, once  you achieve the goal you get, well, may be the fun of the chase!

 

As others have said, with well-chosen issuers, those that give fairly high CLs and don't mind a lot of neglect, you can reach the goal without too much backward movement.  Go all out with say Sync, and while you may do very well for a while, it can come crashing back as quickly.


^^^ This

An excessive number of cards and higher than needed CL's have a cost and many, dare I say most would be better off chasing other things. Dozens of CC's and 1M in CL's don't really mean much.  Investments, income, properties, etc should be financial goals not CL's.  As with all things, a few with really high spend need extremely high limits, however most are just chasing something because it is there. 

Message 7 of 11
Aim_High
Senior Contributor

Re: Total Credit Exposure Question


@Under_Repairs wrote:
Do you guys have any issues with maintaining all of your credit card limits?  ....  I have seen many people on this board with a LOT of credit cards in their signatures with exposures well above $300k and I'm wondering how hard it is to manage all of those cards? Do others have high credit limits on cards they never use and it doesn't get decreased? Any insight on this, or how you manage all of your cards would be incredibly helpful.

Good advice upthread so far, @Under_Repairs.  I completely agree that setting a goal of an arbitrary high TCL just because you see others post with that can be inappropriate.   There are a LOT of different credit profiles, income profiles, spending profiles, and lifestyles among our community.  That $300K CL may be only 50% of income if someone makes $600K per year, but it could be a heavy 6X multiple of income if you make $50K.    That person with the higher income probably has higher spending and ability to repay that debt easily.  And it wouldn't spook lenders to see that profile.  As another example, some of our members have very heavy business expenses, either through self-employment or reimbursement from their employer.   Without a need such as heavy business spend, you'll find that even many of us with a lot of cards are still in the neighborhood of 1x - 3x household income in TCL.

 

As a general statement, using your cards that you want to keep open for at least some charges once every three to six months is suggested.  That may not be enough, but it's a start. I've had cards go for much longer periods without swipes, but they were often associated with a lender where I also maintained deposit accounts.   In particular, I've found that retail store cards can be more volatile and quickly closed if not used.  (Comenity Bank and Synchrony Bank both issue a lot of these types of cards and may be more quick to close them say, a Visa card from Chase or a Discover card.) 

 

As you experienced, some lenders also may not outright close a card to begin with but they may CLD an account, sometimes as a precursor to closure if the usage doesn't increase.  Take that as a warning shot of further action if you care about the account.

 

Some of our members use a recurring monthly charge and automatic payment-in-full on some accounts for small charges like Netflix or a gym membership just to keep a card active, even from the sock drawer.  Some pull them out every few months and run an Amazon gift card charge or small supermarket charge on each one.  I would avoid that if possible, though, since it may not be sufficient activity with some lenders to avoid closure or Credit Limit Decrease. (CLD)

 

Other lenders may allow high limits to stay intact as long as you are using their card regularly, paying on time, and your overall credit profile doesn't raise alarms.    I've been able to keep cards with limits $25K and higher that haven't seen anything close to that level of activity, but they also have been used regularly.   Whether a bank allows this likely includes many factors such as your relationship with them (deposits or investments), as well as credit score and profile, card history including length of account, overall usage, and payments history. 

 

Deciding on how many cards you want to manage and can successfully manage takes a little thought.  Just because you see other profiles with two or three dozen cards open doesn't mean it's for everyone.   I've got 21 cards in my profile but they aren't all getting used at the moment.  Even so, it can be a lot to track, and it requires an awareness to juggle it all.   Some people only want three cards.  Others find six works for them.  Some will increase to one or two or three dozen and be unphased.  

 

If you'll notice, some of us have multiple cards with the same lender.  Some of us also have deposit accounts with more than one of those lenders also.  That makes it easier to log into your account on the website or app and check or pay each one. 

 

For some suggestions, don't open cards just to be opening cards (or just for SUBs.)  Have a need for that credit and a longer-term use for it, such as to replace a less-desirable card.   Sometimes, it's easier to focus on the cards you have and making them grow (sometimes with soft pull CLIs) instead of adding more and more cards.  If you want to add cards, do it slowly over time and make sure you're staying on top of it all.  It's easy to overdo it and you don't want to miss a payment date.  Set up automatic payments on your cards to help avoid this (for the minimum due), even if you plan to pay them in full manually.  It's a great backup.  Even if you're not using an account one month, log in and make sure there aren't any unauthorized (fraud) charges.  I've had fraud on accounts even when the card wasn't present or swiped.  



Length of Credit > 35 years; Total Credit Limits > $600K
AoOA > 28 years (Jun 1993); AoYA (Nov 2021)
* Hover cursor over cards to see name & CL, or press & hold on mobile app.
Message 8 of 11
Under_Repairs
Valued Member

Re: Total Credit Exposure Question

Thank you all for the great feedback and advice. I do want to be clear though... I do not want an arbitrary CL because I see others have high limits in their signatures. I want a $200k total credit exposure because I have very high monthly spend on my cards and the more exposure I have, the less total utilization reported to the bureaus. I pay all of my cards in full every month, but statement days and due dates don't always align, so that is why I asked the question. I mentioned the folks with high limits in their signatures because I wanted feedback from those folks because I assumed they would have the advise on how to manage that many cards. I recently started only using my Venture X to get the sub, but I think getting the Savor card in about 5 months would be a fantastic two-card lineup that would be easy to manage. Then, I can just put some spend across my other cards every few months to make sure they are active. Thanks again for all of the advise and comments... you guys are great and this is the best forum out there when it comes to managing credit!



Beginning of My Journey 10/2017 (3 yrs after filing Chp13 BK)


Bankruptcy Discharged on 12/4/2019 (FINALLY!!!)

Current FICO 8 Scores as of 12/7/2021

Current FICO 9 Scores as of 12/7/2021
Message 9 of 11
Aim_High
Senior Contributor

Re: Total Credit Exposure Question

Thanks for that clarification of your motivations and circumstances, @Under_Repairs

 

You made a good point about something else. Many of us only carry a limited number of our cards for weekly usage. For examples, retail store cards or specialty cards such as hotel or airline cards may be ones you choose not to carry unless you're traveling, shopping, or working on a SUB. Or if we have multiple cards earning 2%, we might periodically rotate the one in wallet. 

Many of us have also added utilization padding to help buffer impacts to FICO scores. Keeping posted utilization as low as possible on each card as well as overall will help stabilize scores. If possible, paying cards multiple times per month before new charges post is a technique some of us use to keep on top of managing multiple accounts. I have a folder on my phone loaded with bank/card apps and can review/pay each account quickly in sequence if I have a few minutes regardless of my location. 



Length of Credit > 35 years; Total Credit Limits > $600K
AoOA > 28 years (Jun 1993); AoYA (Nov 2021)
* Hover cursor over cards to see name & CL, or press & hold on mobile app.
Message 10 of 11
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.