What To Do With Low Limit Cards

OmarGB9 · ‎02-16-2022

@bigseegar wrote:
@OmarGB9 wrote:
@Flex1 wrote:
@K-in-Boston wrote:
Oh certainly I don't think anyone would dispel there can be an emotional aspect to it. I wrote in another thread about how I almost closed my Target card when it was still at $800 14 years after opening it (it started growing after I thankfully decided not to). I was annoyed with it, but really there's no other way to get 5% at Target year round so I would only have been punishing myself. But I did do it with all of my Capital One cards. Being objective, that probably wasn't the greatest move since I'll be completely losing their age from my reports in a few years and 25+ year-old cards can lend quite an average age buffer.

But as far as scoring penalties the thread began with? None. And I have never heard of anyone having an issue with opening new accounts because of the presence of a card or cards with lower limits when they had others more fitting and their profiles supported it.
It may have no impact on approval. However, in my experience, I strongly believe that with certain institutions, particularly the big banks, that it can and often does have an undesirable affect on the SL the given.
I personally dont think it affects SLs. My highest limit to date was previously a $2k Navy card. Penfed approved me for $6.5k right out of the gate this past December. That same $2k Navy card was previously my highest limit, and it came on the heels of an "amazing" $1k Merrick bank approval. So, no, low limits don't mean you'll perpetually get more low limits. Obviously every profile is different, but there are numerous DPs on here of people being approved for huge limits eventually even when their current cards have "toy" limits.
We'll never truly know to be honest. We can only speculate.
But one could also argue that for PenFed who is one of the CU's known for really good SL's, that $6.5K is a low SL

Depends how you define "low." For me, and for a lot of people, $6.5k would be considered really good. Especially since not that long ago, my highest limit was only $1k. Not everyone qualifies (or even cares for) $25k+ limits.

Last App: 1/10/2023
Penfed Gold Visa Card

Currently rebuilding as of 04/11/2019.

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Flex1 · ‎02-16-2022

@Red1Blue wrote:
Hi @Flex1 How many account with high limits one should have when they also have some small limit accounts reporting to be able to attract high limit cards? Also what do we define the low end of the high limit cards? Is it $5k is the low end of the high limit cards?

Everyone has different criteria and standards. This thread is personal to me because I had a USAA Amex with a SL of 500.00. It drove me nuts. There is a thread here about, probably a few years ago. However, I canceled that card. About two or three months after closing it, I applied again for the same card. They gave me a SL of 10,000. Nothing had changed on my credit during this time. I'm solid. My Fico's bounce but stay between 824 and 794. Personally, there was no way I was accepting a 500.00 limit. Most people say keep it and it will grow etc... Although, sometimes it grows and sometimes it never does. It seems that, for whatever reason, some accounts are flagged with a particular metric upon approval( regardless of credit score etc) and are indefinitely kept at a very low limit.

Flex1 · ‎02-16-2022

@OmarGB9 wrote:
@bigseegar wrote:
@OmarGB9 wrote:
@Flex1 wrote:
@K-in-Boston wrote:
Oh certainly I don't think anyone would dispel there can be an emotional aspect to it. I wrote in another thread about how I almost closed my Target card when it was still at $800 14 years after opening it (it started growing after I thankfully decided not to). I was annoyed with it, but really there's no other way to get 5% at Target year round so I would only have been punishing myself. But I did do it with all of my Capital One cards. Being objective, that probably wasn't the greatest move since I'll be completely losing their age from my reports in a few years and 25+ year-old cards can lend quite an average age buffer.

But as far as scoring penalties the thread began with? None. And I have never heard of anyone having an issue with opening new accounts because of the presence of a card or cards with lower limits when they had others more fitting and their profiles supported it.
It may have no impact on approval. However, in my experience, I strongly believe that with certain institutions, particularly the big banks, that it can and often does have an undesirable affect on the SL the given.
I personally dont think it affects SLs. My highest limit to date was previously a $2k Navy card. Penfed approved me for $6.5k right out of the gate this past December. That same $2k Navy card was previously my highest limit, and it came on the heels of an "amazing" $1k Merrick bank approval. So, no, low limits don't mean you'll perpetually get more low limits. Obviously every profile is different, but there are numerous DPs on here of people being approved for huge limits eventually even when their current cards have "toy" limits.
We'll never truly know to be honest. We can only speculate.
But one could also argue that for PenFed who is one of the CU's known for really good SL's, that $6.5K is a low SL
Depends how you define "low." For me, and for a lot of people, $6.5k would be considered really good. Especially since not that long ago, my highest limit was only $1k. Not everyone qualifies (or even cares for) $25k+ limits.

You have a good point. What is considered to be a low SL will vary, depending on your credit portfolio and what each individual deems to be acceptable. For me, I don't want anything less than 10,000. But, a starting SL of more than 5,000 is acceptable, to me.

mgood · ‎02-16-2022

@Flex1 wrote:
@K-in-Boston wrote:
Oh certainly I don't think anyone would dispel there can be an emotional aspect to it. I wrote in another thread about how I almost closed my Target card when it was still at $800 14 years after opening it (it started growing after I thankfully decided not to). I was annoyed with it, but really there's no other way to get 5% at Target year round so I would only have been punishing myself. But I did do it with all of my Capital One cards. Being objective, that probably wasn't the greatest move since I'll be completely losing their age from my reports in a few years and 25+ year-old cards can lend quite an average age buffer.

But as far as scoring penalties the thread began with? None. And I have never heard of anyone having an issue with opening new accounts because of the presence of a card or cards with lower limits when they had others more fitting and their profiles supported it.
It may have no impact on approval. However, in my experience, I strongly believe that with certain institutions, particularly the big banks, that it can and often does have an undesirable affect on the SL the given.

Having large limits on cards will greatly improve your odds of getting similar, or even larger, limits on future cards. But I haven't seen anything to indicate that having some lower limits in the mix is going to affect future limits.

If your largest limit is $1500, they're probably not going to give you a $15,000 card. But if you have a handfull of $10k to $20k cards, that $1500 card is not, IMO, going to hold you back. I believe that after deciding to approve you for a card and when trying to determine where to set your starting limit, they are looking at what you have shown the ability to handle. Ok, you have had a $12k card for a while and haven't screwed up with that, we want to give you something in that ballpark. If we really like your profile and want to be your favorite card, maybe we'll give you $15k, or even $20k.