Why do you need high limits if you don't use it?

Anonymous · ‎12-18-2014

Anonymous · ‎12-18-2014

If they will give high limits then why not? It isn't hurting you.

b_diddy · ‎12-18-2014

@Anonymous wrote:
One of my friend asked me a question which I thought to ask here. Take me for example, I spend couple thousand dollars a month and have $30,000 credit limits on three credit cards. He was saying there is no need to apply for more credit or to request a CLI. He said if I spend $3,000 a month I don't need limits more then $10,000 because the utilization will be 30%. What do you guys say. I seen people with $100,000 + CL. What would your respond be to my friend?

Few things here:

(1) Right, if you spend (report balance) $3k/month and you have $10k CL, your utilization is about 30%. However, with $100k CL, your utilization is 3%. This matters to your FICO score and to underwriters. On the other hand, too much free capacity beyond your income and ability to pay it back will be a negative for some underwriters.

(2) Risk data shows that people who can handle large amounts of credit while keeping utilization low are much less likely to default.

(3) It's fun! :-)

FICO Scores: EX 733 (1/17/15) EQ 761 (1/17/15) TU 750 (1/17/15)

Anonymous · ‎12-18-2014

@b_diddy wrote:
@Anonymous wrote:
One of my friend asked me a question which I thought to ask here. Take me for example, I spend couple thousand dollars a month and have $30,000 credit limits on three credit cards. He was saying there is no need to apply for more credit or to request a CLI. He said if I spend $3,000 a month I don't need limits more then $10,000 because the utilization will be 30%. What do you guys say. I seen people with $100,000 + CL. What would your respond be to my friend?
Few things here:

(1) Right, if you spend (report balance) $3k/month and you have $10k CL, your utilization is about 30%. However, with $100k CL, your utilization is 3%. This matters to your FICO score and to underwriters. On the other hand, too much free capacity beyond your income and ability to pay it back will be a negative for some underwriters.

(2) Risk data shows that people who can handle large amounts of credit while keeping utilization low are much less likely to default.

(3) It's fun! :-)

+1 to number 3

new addiction for me and healthier than the other ones I've had!

chalupaman · ‎12-18-2014

Utilization, being able to actually use the card and not worry about maxing it out, that sort of stuff and also it's a thrill trying to see if I can go higher with my limits. I'd definiely like to have a 10K limit card one day and technically with Chase, I have over 10K in credit from them so perhaps consolidation will be a possibility in the future.

Tradelines: Macy’s - $18k, Penfed Power Cash Rewards - $10k, Ethan Allen (TD Bank) - $5.7k, Kay Jewelers - $5.5k, Appliances Connection - $5.3k, Jared - $5.25k, Best Buy (Citi) - $5k, Dell Preferred Account - $3.5k, Samsung - $3.2k, Firestone CFNA - $3.2k, Capital One Platinum - $3k, Mercury MC - $2.25k, Williams Sonoma - $2.1k, Wayfair (Fortiva) - $2k, Amazon Store Card - $1.8k, Apple Card - $1.7k, NFCU cashRewards - $1.5k, CareCredit - $1.5k, B&H Photo - $1.5k, Adorama - $1.25k, Ebay MC - $1k, Sam’s Club MC - $1k, American Eagle - $1k, Ollo MC - $600, Mission Lane Visa - $500, NY & Company - $500, Walgreens - $500, Home Depot - $500, Target RED Card - $500, CapOne Secured MC 0 AF - $500, Penfed Overdraft LOC - $500

Current FICOS: Mid 640s-50s on all reports, Ch 7 BK D/C Aug 2019
Starting scores: EX - 534, EQ - 574, TU - 516 | Total TLs: $91k approx | Total Utilization: 17%, getting this back down

Involver · ‎12-18-2014

You do it because you can.

It's also great for utilization purposes to maximize FICO scores if you're looking for home or auto purchases.

Mostly it's just a game though, at least to me.

NRB525 · ‎12-18-2014

OP, your friend is free to not apply for any more cards.

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
March 2021 $33k on $312k EQ 796 TU 798 EX 801
May 2021 Paid all Installments and Mortgages, one new Mortgage EQ 761 TY 774 EX 777
April 2022 EQ=811 TU=807 EX=805 - TU VS 3.0 765

aav · ‎12-18-2014

@NRB525 wrote:
OP, your friend is free to not apply for any more cards.

+1 I don't feel that I have to justify my credit to anyone! What you want or need in terms of credit is your business lol. I have more credit than I i need, but I don't know what my future needs. So I like to be prepared and have a cushion for spending. My score just went up with a CLI that placed my utilization at 5%. That makes me happy!

EQ - 834 TU - 823 EX - 822
Amex NPSL Amex BCP - 25,000, Amex EDC - 12000, Diner's Club Premier -35,000, Ritz Carlton - 22,500 Discover 25,100, Chase Reserve -31,000 Total Rewards 13200, Barclay 10000 Citi Diamond P 8,900

uswala · ‎12-18-2014

@b_diddy wrote:
@Anonymous wrote:
One of my friend asked me a question which I thought to ask here. Take me for example, I spend couple thousand dollars a month and have $30,000 credit limits on three credit cards. He was saying there is no need to apply for more credit or to request a CLI. He said if I spend $3,000 a month I don't need limits more then $10,000 because the utilization will be 30%. What do you guys say. I seen people with $100,000 + CL. What would your respond be to my friend?
Few things here:

(1) Right, if you spend (report balance) $3k/month and you have $10k CL, your utilization is about 30%. However, with $100k CL, your utilization is 3%. This matters to your FICO score and to underwriters. On the other hand, too much free capacity beyond your income and ability to pay it back will be a negative for some underwriters.

(2) Risk data shows that people who can handle large amounts of credit while keeping utilization low are much less likely to default.

(3) It's fun! :-)

+1

creditFiend · ‎12-18-2014

+2😉