Closing accounts to get an increase?

[Anonymous]

Well we found more info on why did the CU's undewriter came to such decision yesterday. According to her my wife's the overall utilization is at 34% and that is why she couln't increase her credit limit. 

I'm guessing calling Barclay and asking to be moved to the Barclay Ring will result in a denial at this poin, right?

[Anonymous]

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@takeshi74 wrote:

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@Anonymous wrote:

Is she right?

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We're not underwriters for that credit union so we cannot verify or refute her claim. 

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Sorry. What I'm asking is if it is normal for an underwriter to ask someone to close lines of credit in order to just increase the limit on the loan or card.

[Anonymous]

I have heard about underwriters refusing to grant extra credit to people that they feel are risky in some way.   We're not professional underwriters and we don't know all the details of your wife's profile and what that U's policies might be, so that's why it's hard to say much more.

One thing that jumps out at me, which I am not sure anyone has mentioned yet is your comment that "My wife really cares about APR."  People who care a lot about APR are people who often carry a balance, i.e. who do not pay in full.  Some banks and CU's (not all) find the act of often carrying a balance to be worrisome and a red flag, since such people statistically pose far higher risk than those who usually pay in full.

For a number of reasons it might be worth considering not directing your energy in the area of more or different credit cards or bigger limits -- but instead putting in the opposite direction.  I.e. instead of finding ways to go further into debt, it might be worth trying to pay off all your existing CC debt and then continue to pay all CCs in full while keeping total utilization at under 5%. See what that's like for a year or two.  It might cause your CU to alter their perception of her risk, and might also alter your own credit style in a way you end up deciding you like.  That's just a thought, totally don't have to go with it.  Best of luck regardless...

[Anonymous]

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@Anonymous wrote:

I have heard about underwriters refusing to grant extra credit to people that they feel are risky in some way.   We're not professional underwriters and we don't know all the details of your wife's profile and what that U's policies might be, so that's why it's hard to say much more.

One thing that jumps out at me, which I am not sure anyone has mentioned yet is your comment that "My wife really cares about APR."  People who care a lot about APR are people who often carry a balance, i.e. who do not pay in full.  Some banks and CU's (not all) find the act of often carrying a balance to be worrisome and a red flag, since such people statistically pose far higher risk than those who usually pay in full.

For a number of reasons it might be worth considering not directing your energy in the area of more or different credit cards or bigger limits -- but instead putting in the opposite direction.  I.e. instead of finding ways to go further into debt, it might be worth trying to pay off all your existing CC debt and then continue to pay all CCs in full while keeping total utilization at under 5%. See what that's like for a year or two.  It might cause your CU to alter their perception of her risk, and might also alter your own credit style in a way you end up deciding you like.  That's just a thought, totally don't have to go with it.  Best of luck regardless...

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You are absolutely right, she does like carrying a balance, I personally despise that. I appreciate you honesty. She is currently trying ot paid that balance along with the one she has in capital one.

[Anonymous]

Get her balances paid down to under 9% of her credit limit. Then apply for the Barclay Ring card. Make that her primary spending card after she gets it.

[Anonymous]

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@Anonymous wrote:

Get her balances paid down to under 9% of her credit limit. Then apply for the Barclay Ring card. Make that her primary spending card after she gets it.

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She is currently using her CU's credit card as primary spending card, hence the fact she wanted to increase her limit, not to use it but just to have it for emergencies with such low APR.

[Anonymous]

Good for you, Buddy.  (Actually, I was going to say Good for you, buddy with a small b -- and then I saw that your name IS Buddy.  :-) )

Three cheers to your wife, too.  It's hard changing how you spend money, so congrats to her for trying something new.

Note that even when you really need to spend a lot one month, you can still do it in a way that keeps your reported utilization very low even if your credit limits are not high.  It just means going in a couple times during the month and paying the card down. 

The real trick in life (I am discovering) is keeping all kinds of spending down period, regardless of what tricks you play with your credit.  In one of his books on investing, William J. Bernstein observes that working class guys are often able to retire earlier than doctors and lawyers and CEOs, because the latter's high salaries are eaten up by self-inflicted needs to spend money (expensive cars, vacations, houses, clothes, etc.).

[Anonymous]

Just wanted to agree she should go on walmart chat and ask for a huge credit limit increase, as they will counter. I have scores in the 650s and they just recently gave me an increase from 1150-4000! I asked for 5000 and they countered. And ive only had the card for one year.

There's nothing to lose, its a soft pull. But it has to be chat (green button available m-f business hours or so), not the luv button (request a credit increase). With her scores, i cant imagine they'd say no. And i dont think ive ever heard of walmart doing an apr reduction. But if she gets a huge credit increase, itll help her utilization, thus helping her get that cu card!

[Anonymous]

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@Anonymous wrote:
Just wanted to agree she should go on walmart chat and ask for a huge credit limit increase, as they will counter. I have scores in the 650s and they just recently gave me an increase from 1150-4000! I asked for 5000 and they countered. And ive only had the card for one year.

There's nothing to lose, its a soft pull. But it has to be chat (green button available m-f business hours or so), not the luv button (request a credit increase). With her scores, i cant imagine they'd say no. And i dont think ive ever heard of walmart doing an apr reduction. But if she gets a huge credit increase, itll help her utilization, thus helping her get that cu card!

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Will the "green button" be located at walmart.com/credit or does she have to sign in?

Thanks.

[Anonymous]

It may be worth keeping a couple things in mind.  First, if I read your early posts right, she doesn't like the Walmart card.  Second, Walmart cards appear to be classified by FICO as "low quality" cards and having one can actually do some harm to one's score.  (Obviously there are exceptions: if a Walmart card is your only account, or the only account that you have an unbroken long record of positive data, then it is helping you out much more than not.)

So your wife may want to rethink trying to find ways to extend a card that she doesn't like and which might be on the whole costing her some points.

If you want to explore the question of the extent to which certain kinds of accounts are looked at as actual liabilities by FICO, do a search for WALMART CONSUMER FINANCE -- you should see a number of posts.

I appreciate your willingness to hear me out earlier.  In general, I'll probably be the guy repeatedly giving the BO-ring unsexy advice which is to resolutely resist the urge to secure more extravagant capacity to be in debt, but rather instead to focus on keeping spending and debt low.  It's an ironic thing, I realize, but the only people for whom lots of cards and/or bigger and bigger credit limits are a good thing are people who never carry a balance and are spending far less than they make (i.e. are putting at least 20% of their take home pay into savings).  Unless a person is doing that, the best solution to their credit issues is not credit expansion but spending reduction.  That's only one man's opinion, but it's what I think.