Unnecessarily high CLs?

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CarefulBuilder14
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Unnecessarily high CLs?

Postby CarefulBuilder14 » Sat Jun 13, 2015 4:46 pm

When it comes to CLs, the general consensus is that bigger is always better. It’s certainly true that if you spend a lot on a card, then having a high CL (or NPSL) is nice.

But here are some cases where it seems a bit unnecessary or even ridiculous. I’d happily take a higher CL on my EDP or CSP, but I certainly don’t need more on my BCE or Sallie Mae. Those BCE ($6k) and SM ($4.5k) limits are in excess of what I need, but I don’t think they are unusually high.

I see people who already have $10k+ of credit on individual store cards they barely use constantly pushing for more. It’s also true of some major network cards with lousy rewards but high CLs.

I don’t totally get why the focus on high CLs is so common. Getting a higher CL on a card you don’t use much seems very counterproductive. It doesn’t take very many $10k+ CLs to quickly put most people into the “too much available credit” category where they can get declined despite an otherwise good application.

Unless you have a commensurate income, isn’t a high CL on a card you don’t use much just kind of dead weight?

My highest CL is only $6k, but I get instant approvals for the cards I want. I don’t have my existing CLs crowd out a new card I might really like.

Of course, if someone has high utilization or needs to do a BT, I can understand the desire for a high CL. I’m talking about people who PIF and just like the high CL game. The rewards/bonus/perks game is a lot more fun. :D
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Might add: Proper business card, CSR, Ritz, Delta Gold, First Tech, BofA Travel PH, Aviator Red


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obxfisherman
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Re: Unnecessarily high CLs?

Postby obxfisherman » Sat Jun 13, 2015 5:04 pm

I agree that High CL especially on lines you don't use is rather unnecessary. I think the issue, at least for me, comes back to the whole credit card game being semi addicting. You know addicted to applying for credit, getting a large number of cards, etc. I think again getting high CL falls into that category. I know for me personally I've grew up in a situation that always seemed to have money problems. We would have money, but it wouldn't be budgeted properly for various reasons and so we would end up short. My parents didn't have the luxury of credit at the time, so we would be put into a bind on some occasions. So for me, part of the issue is I always want to have enough credit to cover some expense if it came up....My marriott card alone would cover any expenses I could imagine for quite some time so again I don't think that is something I should worry about, but then it comes back to the whole being addicted thing, sort of.

For some it may be some status symbol to have a high CL. I'm not sure. Again I feel I have too much open credit right now. 61K is way too much lol. I think for me If I do something like this or my final card line up:

Marriott 12.9K
AMEX 7K
Navy 5K
Discover? 3K
Some Random MasterCard 3K
That's like 30K right there which is again still more than enough. Me though I can't just go close all these cards at once...until I pay off my debt. Even then it will be a slow process for me to close cards, but i'd like to decrease my credit exposure...

Sorry went slightly off topic there but yea your points are valid on the high CLs I personally don't really need them...you're correct.
Cards Currently In My Wallet(See Avatar)
Chase Marriott Rewards Visa Signature (Daily Purchase): 13.4K
NFCU Visa SignatureCash Rewards: 5K
Sheetz Discount Card 3c Off PerGallon Of Gas Everyday

Total Credit Card Limits Roughly: 61.5K

whit
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Re: Unnecessarily high CLs?

Postby whit » Sat Jun 13, 2015 5:07 pm

The higher the better to me regardless; although i understand why not everyone can get high limits since it should correlate with the amount of purchasing power you have imho

For me, utilization is important for credit scores purpose but even more important (personally) I like the power of being able to charge whatever I want on my credit card as long as I have the ability to pay it back

I don't want to run into a ceiling and have to worry about whether I should carry an extra card or not.

I don't carry debit cards or my prepaid one much

Usually it's discover and mc

Amex is at home with the bank cards.

But that's just me.

I'm waiting for the day I can go on my phone and command an atm to give me money through an app

thom02099
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Re: Unnecessarily high CLs?

Postby thom02099 » Sun Jun 14, 2015 9:10 am

I agree with OP's premise, as one who has some obscenely high CL. Most I didn't ask for, I just got. Yes, I've pursued CLI in the past, but can't recall the last time I actively pursued one, probably several years ago. Auto-CLI have come along though.

There should be a point where we are satisfied with what we have. I've said before and I'll say again...credit is not a competitive sport! Unfortunately, that seems to be the case with far too many denizens of various credit forums. One should be able to say that enough is enough and go and stay in that proverbial garden for a while. Far too many people have the (sometimes unrealistic) expectation of always getting that 3X CLI, or doubling or whatever.

Now that I'm retired and my credit needs have changed, in my case, I'm considering cutting some cards loose, and in some cases, consolidate cards from one issuer into one card. Less to have to track and worry about that way.
Retired, and in the process of retiring cards!
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whit
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Re: Unnecessarily high CLs?

Postby whit » Sun Jun 14, 2015 12:19 pm

Just ask for them to lower your CL to what you want it to be, otherwise it just sounds like when you're complaining/bemoaning/whatever you want to call it--about your cl..

I'm pretty satisfied with my cls in the sense that I don't actively seek for more or apply for ccs (gardening since 13' the same year I applied for discover/started traveling overseas to europe)

But if they want to raise it I wouldn't thumb my nose at it--I doubt they would raise it to 300k on one cc like I saw on someone's statement but, if they did then I would say that's ridiculous

Otherwise anything under the 6 figure range is a ok with me, I only have two cards I actively use, one that I don't and all three are to alert me for any trans over x

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CarefulBuilder14
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Re: Unnecessarily high CLs?

Postby CarefulBuilder14 » Sun Jun 14, 2015 2:57 pm

If someone has a long and clean history, then lenders will probably be okay with a higher available credit to income ratio. If I didn't have PRG, I might be more concerned with wanting a higher normal CL for any very large transactions - on a major network card, that is. Even 1% cash would beat using a debit card.

I just see a fair number of builders and rebuilders with 5-figure CL cards for Home Depot, Lowes, Macy's, and other places where they don't spend much. You can't use those cards for everyday bills, so they don't offer any real spending power.

I guess someone could go overboard with buying a variety of gift cards using a store card and have some emergency fund that way. Not ideal.

*Picturing myself at checkout at Home Depot, looking disheveled, hands filled with $5,000 of Chipotle gift cards.*

If someone has $20k of available credit on a Macy's jewelry card, and other cards give that person a high available credit to income ratio, then that one almost-useless account could crowd out 4 useful $5k cards.

I know that some lenders like to see existing similar CLs before approving a card, but once you have had a $5k-$10k card for a year or so, how much additional value can there really be in having experience with a $20k card?
Very useful: SchwabPlat, CSP, IHG, Costco (was AA Plat), Freedom, SPG, Prestige (retention)
Somewhat useful: Discover, ED (was EDP), BCE, Hyatt
SD with activity alerts, might close: Arrival

Might add: Proper business card, CSR, Ritz, Delta Gold, First Tech, BofA Travel PH, Aviator Red

Vermonster
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Re: Unnecessarily high CLs?

Postby Vermonster » Sun Jun 14, 2015 3:28 pm

I like having a CL equal to about 300% of my monthly spend. This keeps me under the 30% that FICO likes to see, and gives some headroom for an unexpected expense (AKA car repairs).

Eventually I'd like to have a high limit Home Depot card so we can finance some house repairs. But first I need a house :P
Chase Freedom $9k~~Chase Sapphire Preferred $6.5k~~Amex Blue Cash Preferred $12.4k~~Citi Double Cash $4.7k

whit
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Re: Unnecessarily high CLs?

Postby whit » Sun Jun 14, 2015 3:59 pm

I guess we have two different views of cc in general. My mom got me a cc when I was younger for emergencies after I turned 16 with my permit because if I was driving and anything should happen; while she doesn't want me to have the cold hard cash on me (something that can be stolen or more likely in my case lost without recovery means)

Than I have that card as a security blanket but it's one she would pay off in full every month.

It also started me off the path of credit early

I work the same way in the sense that I don't like to carry cash and I like to put everything on credit because it's money I'm already spending and merchants already worked in the pricing of using payment services into their goods so why not?

Plus I did get paid back once for helping a friend buy goods on discount and before I had a chance to deposit the cash my wallet was stolen; a few hundred dollars I never saw again.

I think as long as it's done responsibly there is no harm; unfortunately with the way this country (us) works these days not a lot of folks come out of school with the sense of budgeting and balancing checkbook so they learn the hard way.

But never ever should credit cards be used as emergency fund; since that's money you don't have to begin with but I guess it's better rate than the check cashing spots and,

I found it's much easier to get folks to plunk down a few hundred for a bag or a few thousand for electronics than it is to get them to put away that amount in a savings account

They'll try to argue that savings account doesn't earn much interest anyways but that's not the point

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Re: Unnecessarily high CLs?

Postby Vermonster » Sun Jun 14, 2015 4:31 pm

whit wrote:But never ever should credit cards be used as emergency fund; since that's money you don't have to begin with but I guess it's better rate than the check cashing spots and...


I would disagree. While most of us see Credit cards, as you said earlier, as a way to make a small percentage back on purchases that you are going to make anyway, there are other reasons to use them.

I sent my car to the shop and it quickly turned into a $5000 bill. New engine plus a few other little things quickly adds up. I was in the middle of school, and my boss had just moved across the country, so I was now in charge. The last thing I need to think about was whether I had enough money in my checking account to pay for this all. Putting everything on the credit card meant I could pay one bill at the end of the month and figure out where the money was coming from after I got my car back on the road.

In our current situation, not having one of our two cars leaves us with either a $300/week rental, or a $0 per week paycheck. Maybe I'm alone here, but I think credit cards are by far the best option for emergency use. A few extra dollars in interest is sometimes better than the alternative.
Chase Freedom $9k~~Chase Sapphire Preferred $6.5k~~Amex Blue Cash Preferred $12.4k~~Citi Double Cash $4.7k

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CarefulBuilder14
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Re: Unnecessarily high CLs?

Postby CarefulBuilder14 » Sun Jun 14, 2015 4:35 pm

I'm in the camp that strongly favors actual liquid savings. Not only could you be paying a high APR on interest, but CLDs and account closures can hit anyone - especially in a recession.
Very useful: SchwabPlat, CSP, IHG, Costco (was AA Plat), Freedom, SPG, Prestige (retention)
Somewhat useful: Discover, ED (was EDP), BCE, Hyatt
SD with activity alerts, might close: Arrival

Might add: Proper business card, CSR, Ritz, Delta Gold, First Tech, BofA Travel PH, Aviator Red



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