What is the purpose of having a high CL when u never use it?

[odd_dog]

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@Fico2Go wrote:

Odddog...wow that's an impressive exhibition of cards you have.  May I ask when your journey started?  And also are you planning to keep all the cards over time?

Thanks for your   feedback.. for me.. I have been using PayPal mastercard debit for over 10 years.  With 1.5% c ashback I've earned over $10K in the same period of time.  I am trying to convince myself on best practices in terms of how to maximize benefits with credit cards and how to go about it.  Being on this forum was a great start. 

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Hi Fico2Go! I started my credit journey with a Chase card and green Amex when in college and working part time, about 1982/3ish...Believe me I wish I had this forum when I was starting - my joke is I learned about credit on the street!!   Sadly my signature can't actually hold all my cards, the sig pictures would be small, and I am not even counting the store cards....Hey I have over 30 years of credit including mortgages and car loans. I am in the process of "thinning down the herd" mostly if it is in my signature I am keeping, again, FOR NOW...who knows if something new comes up I will app. But I do believe different cards are good for different situations. For travel I have specific cards that get me perks and rewards or status, others are for cash back, etc. That being said I think, (my opinion), it is good to get in with a CC lender and stay with them, make a history with them, partner with them and they will be really good to you, that has been my experience with AMEX, chase, citi and Discover.

[Fico2Go]

BlackRV... I would tend to agree that a borrower that has access to a lot of money and yet spends only a little has a high level of financial discipline.  This is in contrast to  those with $1000 and spend $1050.  YOu make a great point. 

Having said that..I don't think it's necessary to have a high limit CL to qualify for a prime rate loan.  Three simple $1500 tradelines with positive history and mid scores of 760 can get you prime in most cases. 

[Fico2Go]

I am that "young buck" that you speak of from 15+ years ago. 

[Anonymous]

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@Fico2Go wrote:

Having said that..I don't think it's necessary to have a high limit CL to qualify for a prime rate loan.  Three simple $1500 tradelines with positive history and mid scores of 760 can get you prime in most cases. 

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Just relaying what came from the mortgage banker horse's mouth....he thought differently.

[Duncanrr]

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@CreditScholar wrote:

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@Swapmeet wrote:

Thigh higher your limits are, the more debt that you can carry while keeping it at <10% utilization.

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+1. It really depends on your lifestyle and spending habits, but for some the answer is definitely yes.

I just charged $1400 for dinner a few hours ago, so blowing through 5k is very easy. If my CLs were lower, I'd have very high util all the time. At that point my score would tank so for me yes, having higher CLs helps.

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For how many people?

[Pat94108]

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@Duncanrr wrote:

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@CreditScholar wrote:

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@Swapmeet wrote:

Thigh higher your limits are, the more debt that you can carry while keeping it at <10% utilization.

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+1. It really depends on your lifestyle and spending habits, but for some the answer is definitely yes.

I just charged $1400 for dinner a few hours ago, so blowing through 5k is very easy. If my CLs were lower, I'd have very high util all the time. At that point my score would tank so for me yes, having higher CLs helps.

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For how many people?

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That was my question too. How come I wasn't invited? lol

Anyway, interesting thread. From what I understood though it shows financial responsibility when you have a high CL but only use a small amount of it. What's up with the 10% figure though? From what I have read up to 30% is okay. 10% is only when you'd look for credit. 

[Duncanrr]

1-9% UTIL is ideal.  Anything below 30% is good.  50%/75%/90% of CLI on any one particular card is bad.

[MidnightVoice]

One advantage of a high CL on a rewards card is to be able to use the whole CL for a new deck and get hundreds of dollars worth of free books from B&N  

[Fico2Go]

I would also add that as a result of feedback from this forum a key component is the PIF date.  Paying 90-99% of the current balance before the statement date is key.  PIF by the due date is too late.  

While some feel PIF by due date is good enough having a high current balance will effect SPs for auto increases.

I GET IT.  THANKS!

[Revelate]

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@Fico2Go wrote:

Has anyone ever used up most or all of thier $5k+ CL? 

Everyone seems to be pushing for CL increases but how likely are you to use it?  Are high CLs meaningless illusions?  I'm sure there are many here like myself that are positioning their CRs for the highest approval amount and in many cases banking on high CLs to get even higher CLs.  But will you ever get a chance to use it? 

I pose this question beause many members seem to have the following characteristics:

1:  To maintain low DTI most only charge 10% or less of their available credit lines.  So a 10K CL will get used $1000;

2:  There is possibility ( with increasing speed of technology and scores ) that creditors will know almost instantaneously when account balances are increasing;

3:  As TLs usage increases creditors could decrease limits;

4:  Inactive TLs are now getting closed.

Some people shows multiple cards with high limits and yet they use only $500 a month.  Where then is the value of having high CLs?  Thanks for shedding some light... 

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I only mention it because it doesn't appear to have been pointed out; however, judging the incredibly small (irrelevant statistically) population on this forum as anything approaching normal is truly bad assumption .  Pretty much everyone on this forum is an outlier in one way or another in our credit behavior.  

In particular your suggestion that lenders believe that a 50K tradeline would have 10K used or bad things are happening: they don't think that way.