MB131174 wrote:I can see Brad's logic and actually agree with it. He knows what debt he's comfortable with and disciplined to keep it as such. I think $10,000 is more than reasonable. If you find yourself in an unexpected $25,000 emergency, you have a lot more to worry about than utilization and limits. If I were to find myself in a $25,000 emergency that required a credit card I've either done something highly illegal, or have completely ticked off the wrong individual.
That's my thought. If I find myself in a $25K emergency then I may want to just work out a payment program with whomever I owe that money to (like a hospital or something of the sort). I don't think just plunking it on the credit card is going to help me.
MB131174 wrote:On another note: some folks find that the more available credit they have (especially at promotional interest rates) the more unnecessary money they spend. I myself am guilty of this. "Oh look, 0% for 18 months!" Next thing I know I'm online booking a vacation. Been there. Done that. Hopefully never again. I'm still paying for it. Thank goodness Slate had 0% for 15 months on BT and purchases and no transfer fee. I'm still paying for that mistake. The card has a $15,000 limit, but I was smart. I transferred the balances on my soon to be expiring 0% cards to the Slate and gave the card to my parents to hold onto. No, I did not write down the account number. I'd have been tempted to online shop.
I almost always pay in full. Once in a while something will come up where I carry a balance but I try to knock it out as quickly as possible. I'm not the guy (any longer) who carry a balance year round.
One thing that I heard long ago, which I actually think is true, is that people get used to a certain percentage of debt and then they just perpetually carry it.
So, if you have, say 50% utilization as your normal balance and you get another card for $10K, you'll likely rack up that card to 50% utilization fairly quickly (a few months) and the perpetually carry that new debt.
If, however, you pay in full each month, you'll likely knock any balance that you end up carrying out in a few months because it'll bug you that you're not at $0.
For me, this really isn't a self-imposed discipline situation as if to say that if I had $25K I'd go nuts but at $10K I'm OK. For me it's just the notion of: I don't want to every owe a credit card company the amount of a new car (albeit a fairly small car). I really should never be in that situation and, if I am, I've done something horribly wrong.