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I think most people typically don't carry more than a few thousand dollars of CC debt. Sure there are outliers that do, or those that run into spending issues or lack of payment issues but I'm just making a generalization. That said, someone with say $5k in CC debt whether they have $60k in total credit limits or $200k in total credit limits is still going to have single-digit aggregate utilization. The person with $200k in credit limits verses the person with $60k in credit limits won't achieve any better of a score, all other things being equal, as their utilization percentages will both yield the best scoring scenario FICO wise.
Yes, my higher income does get me higher limits. I'm also (after having dealt with a bankrupcy) a hell of a lot more responsible and wiser. the bankrupcy was hellish. That time period taught me a lot, all in good ways! I'm more cautious and frugal. In the meantime went back to school, ended up with a higher income. I work a ton mind you but I'm decently compensated for it.
I live well within my means, but if an emercency cropped up I would have enough in cards to cover + savings.
Many of my cards were either really great starting limits, or, a great starting limits + organic CLI Amex is one i asked for a pretty big raise and they granted that. I don't see myself going higher but its all about what the future brings FWIW, I have a small stable, only 4 cards + paypal credit tradeline. More than that and it would be very hard for me to handle.
@TheVig wrote:
Higher limits, beget higher limits.
While that is far from always true, it's also a bit circular for this discussion, "Why have high limits?" "Oh, so you can get more and higher limits..." Compare "Why do you encourage mice in your house?" "Oh, they breed so I get a lot more mice."
@fritscher wrote:Hi
i am relatively new here..I do see that many people like to keep increasing their credit limits on their cards..I am wanted to do that too but i know I would never use those high limits..Is the reason why to have low util for the most part or do many of you actually charge 15000 a month and pay off? also in order to get about 15000 do you have to have very high income.? just some thoughs..I have the urge to do cli on my current cards just to see if that will make my credit scores go up more etc
thank you for feedback
It comes down to utilisation. Util is the second most important factor in your credit score, behind only on-time payments. Any anything over 10% will affect your score.
So, in your example of having $15,000 in availabe credit, if you have more than $1500 reporting (not even carrying a balance, you can spend $1501 in a month, pay it all off, and still have your credit drop), it affects your score negatively.
And you should easily be able to get at least double your income in total ciredit lines. I am approaching 3 times my reported income.
Utilization freedom pretty much. Sometimes people pay in full and sometimes people want to be able make large spending at times spread out over time without it affecting their score.
@fritscher wrote:Hi
i am relatively new here..I do see that many people like to keep increasing their credit limits on their cards..I am wanted to do that too but i know I would never use those high limits..Is the reason why to have low util for the most part or do many of you actually charge 15000 a month and pay off? also in order to get about 15000 do you have to have very high income.? just some thoughs..I have the urge to do cli on my current cards just to see if that will make my credit scores go up more etc
thank you for feedback
I think most people seek a credit limit increase because a credit limit increase can be requested/granted relatively easily, and a credit limit increase gives immediate gratification to those who are trying to improve their credit. Utilization percentages are the reason/excuse. Disregarding those with lousy credit scores in the sub-prime market, a credit limit increase from a particular bank is a mostly illusory "gain" because that particular bank can decrease the credit limit at least as fast as it increased it.
To a borrower, it's a paradox: the less "need" a person has for a credit limit increase, the more likely it is that person will be given a credit limit increase.
To a lender, it makes sense.
thank you all (so many of you) for your responses..I appreciate it alot..You answered my question.
@longtimelurker wrote:
@TheVig wrote:
Higher limits, beget higher limits.While that is far from always true, it's also a bit circular for this discussion, "Why have high limits?" "Oh, so you can get more and higher limits..." Compare "Why do you encourage mice in your house?" "Oh, they breed so I get a lot more mice."