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Low card limits, do they prevent new larger lines.

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TURNERHOOVER
Established Contributor

Low card limits, do they prevent new larger lines.

Do card lenders take into account present low limit cards and if approved base new ccl off of existing cards.

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Message 1 of 5
4 REPLIES 4
Anonymous
Not applicable

Re: Low card limits, do they prevent new larger lines.

Yes. Part of the reason it's difficult to get big limits early on. 

Message 2 of 5
RobertEG
Legendary Contributor

Re: Low card limits, do they prevent new larger lines.

Most creditors base their approved credit liimits in their assesment of risk analysis, and thus will look at the levels approved by other creditors as an indication of their assessment of your credit risk.

Some creditors have their own assessment and approval algorithms that they use as an alternate to or in conjunction with the FICO algorithm score, so looking at assessed CLs of other creditors is a second peek at their form of risk analysis.

Message 3 of 5
TheGardner
Valued Contributor

Re: Low card limits, do they prevent new larger lines.

I agree with Robert. I think it's both.

 

There is much debate some feel it doesn't matter. Some do. What people experience though is once you start getting higher limit cards suddenly most new cards will be around the same amount. Now, is that because bank B gave me a 10k CL or is it because my overall profile warrants the 10k line which is why bank B gave it to you in the first place? Of course the longer your history with a higher limit the more comfortable other creditors will feel about matching or exceeding that limit.

 

No telling for sure. But some bank will take that first step for a reason and I would assume it is not only one to come to that conclusion. 

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Message 4 of 5
takeshi74
Senior Contributor

Re: Low card limits, do they prevent new larger lines.

Limits are considered but existing limits aren't going to define new limits on their own.  For example, my first $25K card came when the next highest limit I had at the time was $7,500.  Conversely, since then I acquired a $30K card.  A card after that was approved for $4,500.

 

It's never just about one factor with credit decisions.  Limits play a part but all the other usual factors matter as well:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

 

Creditors do not simply match credit limits.  Additionally creditors have different approval critieria so even for the same credit profile one creditor might be willing to extend more credit than another.

Message 5 of 5
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