Is my credit limit too high?

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krystalmarie07
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Is my credit limit too high?

Postby krystalmarie07 » Sun Mar 06, 2011 12:40 am

I'm 21 years old. I've had a car loan in my name for 13 months, I've had a Care Credit card with a $500 limit for (I think) 6 months, I've had a Bank of America credit card with a $600 limit for about 3 months, and I just got approved for a Chase Sapphire credit card with a $5,000 limit about 2 days ago. My question is, do I have too much available credit? Is my "credit ceiling" too high? I don't want this to hurt my score. I use the Care Credit card about every 2 months and I've only used the Bank of America card once and I have already paid off the balance. Can someone please help?


websteth
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Postby websteth » Sun Mar 06, 2011 4:41 pm

krystalmarie07 wrote:I'm 21 years old. I've had a car loan in my name for 13 months, I've had a Care Credit card with a $500 limit for (I think) 6 months, I've had a Bank of America credit card with a $600 limit for about 3 months, and I just got approved for a Chase Sapphire credit card with a $5,000 limit about 2 days ago. My question is, do I have too much available credit? Is my "credit ceiling" too high? I don't want this to hurt my score. I use the Care Credit card about every 2 months and I've only used the Bank of America card once and I have already paid off the balance. Can someone please help?


Are you planning to keep applying for cards? Unless you are planning to get a lot of credit cards, you should be fine. I would sit tight with what you currently have for a while and establish your credit.
American Express: Platinum, Zync, Platinum Delta SkyMiles, Blue, Starwood Preferred Guest
Barclaycard US: iTunes Reward Visa, US Airways Premier World MasterCard
Chase: Sapphire Preferred Visa Signature, Freedom Visa
Citi Bank: Hilton HHonors Visa Signature, AAdvantage Platinum Select World Elite MasterCard
Bank of America Virgin Atlantic World Elite MasterCard
Discover: Discover it
Other:Macy's Star Rewards, Target REDCard

ashleyAMX
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Postby ashleyAMX » Sun Mar 06, 2011 8:02 pm

websteth wrote:Are you planning to keep applying for cards? Unless you are planning to get a lot of credit cards, you should be fine. I would sit tight with what you currently have for a while and establish your credit.



I agree, you should sit tight. Your newer cards are shortening your average age of accounts, which is factored into your score. Right now, i'd say its about 5 to 6 months for you (13+6+3+.03/4 accounts = 5.5). Although your oldest is a year. I know your question is in regards to the limit hurting your score but your length of credit is 15% of your score and new credit is 10%. So, you may want to let your accounts age before you apply for anymore

hotboidrvsf150
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Postby hotboidrvsf150 » Sun Mar 06, 2011 8:20 pm

There is no such thing as to high of a credit limit. The higher line of credit you have, the better. It shows you have good credit to lenders if you wish to apply for something. (house, car, credit card etc.) My first credit card was for $1,000 5 years ago and I call them every year to request a credit line increase. I now have a $14,000 limit with them therefore i have more avaliable credit and it looks EXCELLENT to have a high credit line. Just don't max it out! That does not look good. For example; with your $5.000 limit... try not to have a balance higher than about $1,000 and your credit will be really good in about 12 months as long as you use credit responsibly.

krystalmarie07
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Thanks!

Postby krystalmarie07 » Sun Mar 06, 2011 11:27 pm

I don't plan on applying for anymore credit cards for quite some time. I appreciate everyone's responses and it has made me feel much better about the card with the $5,000 limit. Thank you all so much. As you can tell, I'm quite new to this credit card thing and I really don't want to do anything that hurts my score, especially unknowingly.

krystalmarie07
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Postby krystalmarie07 » Sun Mar 06, 2011 11:55 pm

Also, the reason I was asking was, I went to talk to a banker about whether it would be a good idea to apply for another credit card (Chase Sapphire) and he told me having too high of a "credit ceiling" could hurt your score. He also said that having a really high "credit ceiling" would make lenders avoid giving me loans and more credit cards because they see that I could get into a lot of debt so they don't want to loan me anymore. (I hope the way I typed that makes sense.) Anyway, I may have just misunderstood him but I just wanted to get some reassurance on my decision to apply for the Chase card.

ashleyAMX
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Postby ashleyAMX » Mon Mar 07, 2011 12:07 pm

krystalmarie07 wrote:Also, the reason I was asking was, I went to talk to a banker about whether it would be a good idea to apply for another credit card (Chase Sapphire) and he told me having too high of a "credit ceiling" could hurt your score. He also said that having a really high "credit ceiling" would make lenders avoid giving me loans and more credit cards because they see that I could get into a lot of debt so they don't want to loan me anymore. (I hope the way I typed that makes sense.) Anyway, I may have just misunderstood him but I just wanted to get some reassurance on my decision to apply for the Chase card.


I understand his point. And this is also true having "too many" lines of credit or too much available can also make you look high risk. Unfortunately, there really isn't a magic number on how many lines is enough or how much is enough. Its basically the more leverage you have the more potential you have to over extend yourself.

But, I wouldn't worry about that since you are just starting out. Having 6,000 of available credit is fair, most installments (loans) are more than this. However, once you have cards you are comfortable with using and they meet your needs, then there is no longer a need to shop for credit, and you can focus on establishing a good payment history.

Someone on the forum has a signature that says: building credit is a marathon, not a sprint. Or something like that. I often remind myself of that. I set goals for my score, that don't involve opening new credit and just work with what i have.

websteth
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Postby websteth » Mon Mar 07, 2011 10:10 pm

krystalmarie07 wrote:Also, the reason I was asking was, I went to talk to a banker about whether it would be a good idea to apply for another credit card (Chase Sapphire) and he told me having too high of a "credit ceiling" could hurt your score. He also said that having a really high "credit ceiling" would make lenders avoid giving me loans and more credit cards because they see that I could get into a lot of debt so they don't want to loan me anymore. (I hope the way I typed that makes sense.) Anyway, I may have just misunderstood him but I just wanted to get some reassurance on my decision to apply for the Chase card.

I have seen this happen once in my experience where I was told I had too many open lines of credit. My score was still around 800 but, the bank just saw it as too many open lines. I've learned that if I am happy with what I have, there really isn't a need to continue to get more cards. You start to realize that you will never get the rewards if you are using too many different cards.
American Express: Platinum, Zync, Platinum Delta SkyMiles, Blue, Starwood Preferred Guest
Barclaycard US: iTunes Reward Visa, US Airways Premier World MasterCard
Chase: Sapphire Preferred Visa Signature, Freedom Visa
Citi Bank: Hilton HHonors Visa Signature, AAdvantage Platinum Select World Elite MasterCard
Bank of America Virgin Atlantic World Elite MasterCard
Discover: Discover it
Other:Macy's Star Rewards, Target REDCard

Squid7085
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Postby Squid7085 » Mon Mar 07, 2011 10:36 pm

My limit is hovering around $20,000 with a Car Loan and Student Loans tacking on another $30,000 in "debts." I am also 21, I have no impact to my credit, as a matter of fact, lenders seem to be salivating to give me more credit. So I wouldn't worry about it. :) My biggest issue is age, thankfully I had two cards at 18, so my total age is higher, but my average is about 10 Months right now. Aside from getting my car loan though, the age doesn't seem to be an issue. The only issue I had was BofA was unwilling to give me another card because I already had another card with them. Every other bank was fine giving me a card dispite already having an unused card with a high limit.

krystalmarie07
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Thanks!

Postby krystalmarie07 » Wed Mar 16, 2011 11:33 pm

Thank you all very much for the responses. I'm quite happy with my cards and my limit so I think I'm gonna stick to what I have. :) Thanks again!



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