My credit limit is too low. What should I do?

For just about anything you want to get off your chest about credit cards.
8 posts
JMarston
Green Member
Green Member
 
Posts: 3
Joined: Mon Feb 20, 2012 1:21 pm
Location: US

My credit limit is too low. What should I do?

Postby JMarston » Mon Feb 20, 2012 1:48 pm

I am in a bit of a odd place.

  • Age 25
  • I am told my credit is excellent. My credit score is 770
  • Nearly paid off my 2nd car loan
  • 25% balance on my credit cards ($4500 total credit)
  • Never missed a payment
  • Income of around $350k+ a year
Here is the problem.

I've been paying my daily business expenses through my debit card/checking account
and overtime my expenses have gone up. I thought it would be a good time to start looking into rewards cards for getting cash back. I have a $700 credit card through my bank which I have used here and there and asked to get it raised to a $10k limit, they say this should be no problem and after getting off of the phone twice they tell me the best they can do is $1200 limit because....my credit card limits are low.

So, I have daily expenses of $1500-$6000 which I obviously cant put on my measly $1200 limit card and I feel like I'm missing out on a lot of rewards. I'm not sure what to do here...any advice?

TL;DR: Good credit. $1500-$6k+ daily expenses which need to go on a credit card. Max limit I can get is $1200.


Celestine
Centurion Member
Centurion Member
 
Posts: 152
Joined: Tue Jan 10, 2012 1:02 am
Location: Los Angeles, California

Postby Celestine » Mon Feb 20, 2012 11:54 pm

Is your annual income really a SIX DIGIT ANNUAL INCOME?!

With your good to excellent credit score and a SIX DIGIT ANNUAL INCOME... you should be able to get more credit limit.

Try American Express charge cards (AMEX Green/Gold/PR Gold/Platinum) instead of credit cards. Those charge cards have rewards associated with the card. Or try the Chase Sapphire Preferred credit card.

Your situation is really odd if its true that you earn SIX DIGIT ANNUAL INCOME and have a near to excellent credit score.
"Nearly all men can handle adversity, but if you really want to test a man's character - give him power." - Abraham Lincoln

MOC
Green Member
Green Member
 
Posts: 24
Joined: Sun Feb 19, 2012 7:56 am
Location: NC

Postby MOC » Tue Feb 21, 2012 12:13 am

Even high income people can manage their credit poorly, and banks realize this. Also you shouldn't really consider your business income as your income. After expenses are deducted, you aren't paying taxes on you full business income. Then you have after-tax income. Depending on how your business is setup, it may not even be your income necessarily. If this is truly for a business, you should consider getting a credit line from the bank where interest rates would be much lower and they could give you this credit based on your accounts with them. Putting $6000/day on a 10-15% interest credit card is risky.

Also if your median spend is $3750/day then you are spending over $1.3 million=$3750*365 annually. It strikes me as odd that you haven't paid off a car loan but you have a 6 digit income. You should just slow your spending and pay that car loan off. That will definitely help your credit. More importantly, you should consider discussing these things with an accountant if you are truly spending that much money. You can't afford any mistakes or waste when you are spending that kind of money. Just ask Lehman Brothers.

JMarston
Green Member
Green Member
 
Posts: 3
Joined: Mon Feb 20, 2012 1:21 pm
Location: US

Postby JMarston » Tue Feb 21, 2012 12:15 am

Celestine wrote:Is your annual income really a SIX DIGIT ANNUAL INCOME?!

With your good to excellent credit score and a SIX DIGIT ANNUAL INCOME... you should be able to get more credit limit.

Try American Express charge cards (AMEX Green/Gold/PR Gold/Platinum) instead of credit cards. Those charge cards have rewards associated with the card. Or try the Chase Sapphire Preferred credit card.

Your situation is really odd if its true that you earn SIX DIGIT ANNUAL INCOME and a near to excellent credit score.


Thanks for the reply. Yes, that's the correct income and I am glad I'm not crazy thinking it was weird. When at my bank I was trying to get the normal Chase Sapphire card and told me the minimum limit was $5k which I couldn't be approved for. I do have a Costco Amex card with a $2k limit. You think I should just ask each of the 3 credit card companies for a limit increase? Or maybe pay off my car/CCs to $0 and try again for Sapphire? (it was around 7 months ago when I tried). I was just always under the impression keeping a low balance on cards was good, but now that I'm reading more it seems to be not so good.

PS: Sorry for weird grammar, writing this out on the phone

JMarston
Green Member
Green Member
 
Posts: 3
Joined: Mon Feb 20, 2012 1:21 pm
Location: US

Postby JMarston » Tue Feb 21, 2012 12:29 am

MOC wrote:Even high income people can manage their credit poorly, and banks realize this. Also you shouldn't really consider your business income as your income. After expenses are deducted, you aren't paying taxes on you full business income. Then you have after-tax income. Depending on how your business is setup, it may not even be your income necessarily. If this is truly for a business, you should consider getting a credit line from the bank where interest rates would be much lower and they could give you this credit based on your accounts with them. Putting $6000/day on a 10-15% interest credit card is risky.

Also if your median spend is $3750/day then you are spending over $1.3 million=$3750*365 annually. It strikes me as odd that you haven't paid off a car loan but you have a 6 digit income. You should just slow your spending and pay that car loan off. That will definitely help your credit. More importantly, you should consider discussing these things with an accountant if you are truly spending that much money. You can't afford any mistakes or waste when you are spending that kind of money. Just ask Lehman Brothers.


I have always kept a low balance on my CCs and paying on the car (only has around $1k left) thinking it would build credit faster. I don't always put ~$3750 daily on my debit card; I may go a few weeks putting only $1k on it, but in the past several months it's looking like I might have daily expenses increasing substantially as well which will further me from this high limit credit card issue. I guess I should also consult my accountant. I just have always had great luck with advice I receive online.

DoingHomework
Centurion Member
Centurion Member
 
Posts: 707
Joined: Tue Sep 22, 2009 1:15 pm
Location: Arizona

Postby DoingHomework » Tue Feb 21, 2012 11:21 am

I've got to agree with the gist of the previous posts. You need to nail down facts rather than just throwing a bunch of numbers out. As it stands your statements are very inconsistent and make no sense. If I were a loan officer there is no way I would loan you money!

You say your "income" is $350,000 a year. But I doubt that is your income. That is your business revenue. Your income is revenue minus expenses for the business. Your personal income is whatever you pay yourself out of that.

Now, let's say that you take 20% of the revenue as profit and pay that all to yourself as personal income. Your income (and the business's as well) is $70000 a year. Now, let's also assume that your business costs are about half materials and half labor. Your material costs are (350k - 70 k)/2 = $140,000 a year or about $11667 per month. To support that you probably need a credit line (limit) of about $25000 (a little over twice).

Does a $70,000 income support a $25000 limit? Maybe. But you will definitely need to make an intelligent business case for that.

I don't think that what you want to do is unreasonable. But I do think you need some help in presenting it to a bank in a way that makes you sound credible. Because going in and claiming you have $350,000 in income actually makes you sound like you don't understand teh basics of business. And that would make a bank very reluctant to lend to you on a credit card or otherwise.

User avatar
PlatinumAMEX94
Centurion Member
Centurion Member
 
Posts: 321
Joined: Mon Jan 02, 2012 1:21 am
Location: Denver

Postby PlatinumAMEX94 » Tue Feb 21, 2012 4:16 pm

Go to your personal banker, at the bank where you have your salary direct deposited and then ask him for a credit card with a high credit line. When he says no, you take your credit card with the low credit limit and you prepay it, say, oh, 100k, and then you will never have to worry about those darn charges not going through. Your personal banker will have full access to ALL of your accounts/investments with them. When I have an issue with Chase, I go into the bank to my banker who can see my entire portfolio, not just my Chase United card. The only person you need to convince is the credit analyst, and when he/she sees how much cash you accumulate in their bank, they will be happy to give you a generous credit line. After all, 14 grand hitting your checking account every two weeks should be more than convincing.

Good luck with that and let us know what happens. I am sure we are all very interested why a high earner has such low limits. You might want to look into a financial planner if you are having budgeting issues so young in life.
American Express Platinum Personal, Member since 94
Chase United Explorer - Visa Signature
Chase Sapphire Preferred
American Express Business Simply Cash

American Express Costco Business, American Express Platinum Business
Bank of America 10k, Capital One Venture World MasterCard 7.5k, Fidelity Visa Signature 10k
Citibank ThankYou Premier World MasterCard - Card Member since 91, 25k
Discover 10k Member since 91, Wells Fargo Personal & Business Visa Signature
USAA World MasterCard 12k, Chase Slate Exclusives Visa 5k

Lifelock member, USAA credit monitoring, Security Freezes E/E/TU, 800+

Celestine
Centurion Member
Centurion Member
 
Posts: 152
Joined: Tue Jan 10, 2012 1:02 am
Location: Los Angeles, California

Postby Celestine » Tue Feb 21, 2012 5:22 pm

JMarston wrote:Thanks for the reply. Yes, that's the correct income and I am glad I'm not crazy thinking it was weird. When at my bank I was trying to get the normal Chase Sapphire card and told me the minimum limit was $5k which I couldn't be approved for. I do have a Costco Amex card with a $2k limit. You think I should just ask each of the 3 credit card companies for a limit increase? Or maybe pay off my car/CCs to $0 and try again for Sapphire? (it was around 7 months ago when I tried). I was just always under the impression keeping a low balance on cards was good, but now that I'm reading more it seems to be not so good.

PS: Sorry for weird grammar, writing this out on the phone


No problem about the grammar... I just hope there is no grammar police in this forum XD

As other DoingHomework pointed out... check your true personal income and not your business income. Your accountant should know about it. As PlatinumAMEX94 pointed out, check also with your personal banker if you have one or someone who manages all your investments to know how much you really have as your personal income.

Businesses are separate entities from their owners. Business owners are separate entities from their businesses.

So the business income does not constitute the owners' personal income.

If you have the money to pay off your car loan, then do so. You will have one less debt to worry about.
"Nearly all men can handle adversity, but if you really want to test a man's character - give him power." - Abraham Lincoln



Return to “General Credit Card Talk”

Who is online

Users browsing this forum: No registered users and 0 guests