Just a little something that I got in the mail today...

American Express forum. Talk about AmEx credit cards like Blue, Gold, Platinum, Centurion, and more.
13 posts
jriley
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Postby jriley » Fri Dec 21, 2012 8:30 am

So the card companies assume that you don't need a new card, because you have available credit? What's the logic for the card companies.
Looking to maximize credit, for myself and others.

Fidelity Investment Rewards
American Express Platinum for Morgan Stanley
Chase Sapphire Preferred


fantasy86dj
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Postby fantasy86dj » Fri Dec 21, 2012 2:51 pm

jriley wrote:So the card companies assume that you don't need a new card, because you have available credit? What's the logic for the card companies.


There is not much logic however the amount of available credit was so high that it was holding me back

sticf
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Postby sticf » Fri Dec 21, 2012 5:33 pm

jriley wrote:So the card companies assume that you don't need a new card, because you have available credit? What's the logic for the card companies.


Actually that logic is fairly sound if you edit just a few words out...
"So the creditors assume that you don't need credit, because you have available credit?"

If you have an established credit line that is untapped why would you need a new credit line? I first heard this logic years ago from a loan shark. The "good" ones know a thing or two about lending money to people, this guy had been in business for over 40 years. In a loan shark's mind every time someone new gives you credit, everyone is at risk of not being paid. The shark would rather you go to the people you have relationships with and ask for more credit than open a "new account".

The American credit card system it is not exactly a bastion of logic either. We understand the system because on this board we have spent the time to learn it. I would say most people I talk to have little (or no idea) how the credit score system works in America. Sure people on this board know, but the average consumer just knows to "pay on time and the rest is a mystery". It was not that many years ago that the American public was only vaguely aware that FICO scores existed. The logic of "You have a ton of unused credit so I am going to give you MORE!" is just a tad lemming-like.

Hope it helps...



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