What’s the point in having 100k in limits if you can’t spend it?
Mmmmmmmm
@Saleen099 wrote:What’s the point in having 100k in limits if you can’t spend it?
Mmmmmmmm
@Saleen099 I'm sure it comes in handy when you go to fuel that thing up 
@Aim_High wrote:
@reluctantgarden wrote:Apologies to mods if this isn't proper, but there's a post on the r/CreditCards subreddit with the above subject, and I thought it would be interesting to see what folks here have to say. My response was as follows:
The reasons why I have a $400k TCL are fivefold:
Utilization becomes a nonfactor. Although I never pay interest, I do like using 0%-APR BTs given how well HYSAs are paying. Right now I'm running $27k across three offers, but still only have less than 7% utilization, so...
...my FICOs stay high, currently 775-780.
Flexibility if anything hits the fan: If something bad happens personally, I can weather it without wrecking my credit. And if something expensive (but not necessarily horrible) happens, I can finance it myself at a low rate ($59.9k CC at 9.9% APR, $27.1k BLOC@9%).
Stickin' it to the man for rewards after many years of paying interest: I got myself together financially a couple of years ago, and now I'm obsessed with getting as many points and as much cash back as possible.
Gamification, or me vs. the algorithms: I'm also obsessed with how high I can push CLs and how many tradelines are possible given my scores and income. The latter is maxed out for at least a year since I recently added four CCs and a LOC, but the former continues on given they're all SPs.
Re: "What’s the point in having 100k in limits if you can’t spend it?"
But what if you can?
I initially refrained from responding to this thread as I wasn't quite sure what to make of it. I just posted about attaining a $100K CL on a single card and my TCL is $842K now. The specific $(xx)K is relative to the consumer profile and therefore, possibly misleading about the intent of the original reddit poster. I looked up that thread and he said,
"Why do we work so hard to build when people say you need to pay it off EVERY MONTH? Why would I have 100k in credit if I don’t even make that yearly ? Literally just asking . Answer the question don’t try to berate me for inquiring.
So from the perspective of that OP, he makes less than $100K and apparently has been told by the reddit community to build high TCL of $100K, above 1x his annual income.
Do I (normally) spend $100K annually or higher on my cards? No. Could I do so if I wanted to, and be able to promptly repay it? Yes. Is $800K+ more credit than I'll ever need? Absolutely! So why do I push both my individual and total limits?
- Definitely agree with #1 that utilization padding is a major consideration. I rarely have to even consider how much any charges will impact utilization. It becomes irrelevant. For me, this was a huge "stick it to the man" strategy since I went for many years with credit cards not realizing how much my utilization could be impacting my FICO. (In the early years of FICO, the amount of information on scoring via the webz and forums was just not available like it is today.) So I'll never feel guilty for excessively paddding my utilization as much as lenders will allow. IMO, too many consumers are probably being penalized for utilization factors that they don't understand and might be able to mitigate with some changes in focus.
- Reason (2) - keeping high FICO - is the reason I do number (1). Agreed.
- Financial Flexibility (3) is certainly a factor. Having multiple lender relationships with high limits with each one, ability to do BTs or put charges on various cards, and high enough limits to charge anything I want to charge are all tools in my financial toolbox. Like I mentioned, I don't normally charge $100K or more per year like some of our big dogs on My FICO with large business or personal spend, but my financial assets and income allow me do it if I need or want to. Some may assume I've built my large limits purely out of ego, but everyone's finances and definition of excess are different.
- Number (4) - rewards - is something I've done but has nothing to do with the high limits strategy. It's separate.
- Number (5) - gamesmanship. Of course!!
That has also been a huge motivation for me, to see how high I could push limits, at least to a degree. For me, $100K on one card was a personal goal, and I reached that. I could combine Chase limits today for even higher, but $100K is more than sufficient. I'm pushing towards $1M TCL and might reach that by possibly next year, but I seriously doubt I'll keep going. At that point, game over. I just don't want the added complexity of managing it all, but getting $1M would be kinda cool. Some might find a goal of $10K per card or $25K per card and $100K or $250K in TCL, so how far we want to take the utilization padding and gamesmanship is up to us based on our circumstances.
Beyond the above, I'll add that early in my credit years, I had a very good (not exceptional) score for a long time. Then I went through a very long period (10-15 years) during an unexpected midlife career change where I was carrying debt and trying to dig myself back out. My credit suffered during those years. So now, my high FICOs and ability to get high credit limits are validating to me for all the hard work that I did to repair my credit and finances without having to go through bankruptcy or other extreme measures. I appreciate knowing that my lenders trust me to manage large limits, even if I'm not using a large percentage of them. It feels good to be back on top of the mountain in my finances.
Indeed; being entrusted with a large TCL is another of my motivations I hadn't articulated specifically. And your comments also highlighted an interesting point: that many of us who pursue very high TCL had bad patches in the past we feel compelled to over-overcome
@JoeRockhead wrote:
@Saleen099 wrote:What’s the point in having 100k in limits if you can’t spend it?
Mmmmmmmm
@Saleen099 I'm sure it comes in handy when you go to fuel that thing up
Last Stop before going to Los Angeles was $28,568.36 that was enough to buy a Toyota Camry.
@Aim_High wrote:
I appreciate knowing that my lenders trust me to manage large limits, even if I'm not using a large percentage of them. It feels good to be back on top of the mountain in my finances.
I always seem to get pretty low cash limits, regardless of how high my limits get, but Discover recently approved me for 50% of my total limit. Will I ever use a cash advance limit? Absolutely not! Still, it made me feel good, almost flattered that I was granted it.
@Saleen099 wrote:What’s the point in having 100k in limits if you can’t spend it?
Mmmmmmmm
SHOULDN'T spend it
@FalconSteve wrote:For me:
1) Bragging rights
2) Credit Padding- overall
3) Credit Padding- individual cards (I can put a used car on almost any card and a new car on several- would I want to... well I do get 3% cashback on general purchases on one card)
4) emergencies happen
I have about $200k CL (SO CLOSE to $250k)
EDIT: I just realized they meant $100k on one card, not total.
Actually, the reddit OP posting was referring to $100K in Total Credit Limits, @FalconSteve. For @reluctantgarden's posting, I think the topic was more like, "Why pursue high limits (in general)?" - whether on one card or aggregatge.
