Why do people request such high credit limits?

[Anonymous]

I see lots of people that have multiple credit cards with extremly high credit limits, such as $7,000-10,000.

What is the benefit of having multiple cards and high limits? (besides rewards points/cash back/emergency fund).

(I'm 25 and have a FICO score around 760. I have one Travel Rewards Visa through my Credit Union. My new credit limit is $3,000, which seems ridiculously high to me.)

[Anonymous]

For me, it all depends on how I will use the card. For example, if I'm going on a vacation, I don't want a charge in the thousands on a card with only $5k limit. I make sure to keep my usage below 5% on an cards. I also buy groceries for someone else on a designated card so the limit didn't need to be as high as it is. I might not need a $10k limit on cards, but it's good to have the ability to use the card as I'd like to without my spend affecting my score. My income supports it and I always PIF.
Some people don't like high limits on their cards and even seek to decrease them if they're automatically increased. Some people like to go for the highest limit possible just to see how high they can get or because they put a lot of spend on them.
Whatever fits your needs! Imo there's no right or wrong answer as long as you're responsibile with what you've got.

[Anonymous]

Responsible users want high limits so they wont have to worry about utilization. 

For example i'm rather new to the game and i have to pay sometimes multiple times a month to keep my reported utilization low in case i need to use my scores(so they scores wont decrease due to utilization).

If i had for example a really high limit i'd set auto pay and i'd let it report whatever and still be under 8-9% which is the optimal reported utilization.

Another reason would be to have enough credit to get rewards for a large transaction that might occur once in a while.

[JayTee1]

He asked why people ask for such high limits; I don't think it was a request to brag.

I asked the same question here myself once.  There are a lot of reasons -- high limits allow you to spend more while keeping utilization in check is the primary reason for many, and I know it is for me.

Before I qualified for any high limits, I couldn't imagine that I'd ever need a credit card with a $10,000 limit, much less one for $15,000 or $20,000.  My tune has changed over the years as my financial situation has changed.  It's nice to have cards you can put medical expenses on, or large unanticipated expenses on, without worrying that you've just tapped out your entire credit line.  

If you're younger, you don't have kids or a house, and you don't really spend all that much, it may not seem all that useful, especially if you're always paying your balance to zero every month.

[Kree]

Last time I went to Hawaii on Business I expensed about 6,000.  I flew to Hawaii directly from Indiana where I had about 2,000 expensed.

So even with a 15,000 limit I went over 50% utilization.

My boss's boss flies first and stays at nicer hotels. I've heard that she will spend over 15k in Hawaii when she goes there for a week. 

[Anonymous]

Thanks for your feedback. That makes sense about why you have higher limits. Life does happen and expenses come up. I requested a small increase last november from $1,000, to $1,500 in case job search was longer than expected. (I was out of work three months and my card along with my savings helped pay all my expenses.) 

For me, I am single and have no kids. I am not wealthy and did not grow up in a wealthy family. I try to be wise with my finances and not buy unneccesary things (which is so not easy to do!). 

[Anonymous]

Good points. I'm new to this as well actually. I didn't know my FICO score until about 3 months ago. 

Personally, I requested a credit limit increase from $1,500 to $2,500 a few weeks ago. My credit union gave me a $3,000 limit without doing a hard-inquiry, which has helped drop my utilization ratio. 

[Anonymous]

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@Anonymous wrote:

Good points. I'm new to this as well actually. I didn't know my FICO score until about 3 months ago. 

Personally, I requested a credit limit increase from $1,500 to $2,500 a few weeks ago. My credit union gave me a $3,000 limit without doing a hard-inquiry, which has helped drop my utilization ratio. 

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Hi August.  Just an FYI, you can have a total CC utilization of 1-3% and spend $5000 a month on your cards, even with having a total credit limit of $1500.  If you are curious how to do that, let us know.

[Anonymous]

AugustRush1993: Your score is already very good. It's great that you are asking questions and open to learning. There are quite a few members on here who really know there stuff and their advice can help you plan for where you want to be in your financial future. Here is an article that is extremely helpful. It's for credit rebuilding but I also found it useful to learn about maintaining healthy credit habits.
"ABCD2199's Eleven Rules to Credit Rebuilding"
https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/ABCD2199-s-Eleven-Rules-to-Credit-Rebuilding...
Another great post is about utilization and how it potentially affects your score.
"The Truth about Credit Card Utilization"
https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/The-Truth-about-Credit-Card-Utilization/...
Hope this can help you!

[Anonymous]

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@Anonymous wrote:

... wont have to worry about utilization. 

...

i'd set auto pay and i'd let it report whatever and still be under 8-9% which is the optimal reported utilization.

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This.

I autopay in full every month, but I do not want my uitization too high (though I do not consider myself to have high limits.)

My Ducks Unlimited in particular is always over 10% utilization every month on my gas usage.  I would love to get it up to 4k-5k limit because then I would be under 9% Utilization every month.