A variation on the 20% rule

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A variation on the 20% rule

Postby sdoonan » Tue Dec 20, 2011 12:15 am

I have seen on the Internet (on Capital One's site, of all places) that one should have credit limits no greater than 20% of one's income. Is that common consensus or is the prevailing idea "use as much as you can responsibly handle"?
Cards I Carry:

Visa: CitiForward Student (1k CL, 15.24%), Capital One Student Journey Rewards (.5k CL, 19.8%)
Discover: More Student (1k CL, 17.99% regular, current rate 1.9% through 3/6/12) (Primary card at this time)
AMEX: Blue Cash Everyday (2k CL, 21.25%)

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Postby ooxs » Tue Dec 20, 2011 9:05 am

Assuming i take home 3000.00 a month:

20% of that i owe Capital One: 600
My Rent / Mortgage 1000
Cheapest Car: 300
Cheapest Insurance: 50
Phone/Cable/Electric 200
Gas/Diesel 25/Week 100
Food 200

Let's hope we don't have student loans and don't drink Starbucks or have pets.
Total above is 2450 and while i am not a fan of Capital One, i have to say they are close enough. And the funny thing is, if you took home 4000 and not 3000, you can add a bigger or better Car, phone, bigger place and if you live in CA, good luck finding a place for 1000.

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Postby requiredfield » Tue Dec 27, 2011 8:24 pm

I'd have to say no to this, certainly as a consensus anyway. There seems to be another reason I don't have a Cap1 :ppp

I had to figure this out two ways, my salary when I got them and my salary now. Yes, it's less now. What can I say? I want to work less.

I have one 53/63% and the next highest one is 32/38%. After those two individual lines, I looked at lenders that I have more than one line with...
Chase 67/79% 4 cards
BoA/FIA 32/38% 4 cards
Citi 28/34% 2 cards
Discover 23/28% 2 cards

Looked at it both ways and it would seem to be their formula/policy only.

Even I have to say, it looks like Chase is over-extended at 79%.

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