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CoderBlix

Card limits and banks

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Out of curiosity at what point, if any, do creditors (banks) become concerned with what you are doing with other banks? For example...lets say you apply for and get two Chase cards with 20K limits on each - so 40K...then...6 or 7 months later you apply for and get two Citi cards with 20K limits...so another 40K. Would this / could this be an issue for Chase? Do they care about your total credit exposure or just what you have with them?

 

Do banks set an overall exposure limit for you? Thx in adavance!!!

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Yes, they care about overall exposure because an increase in other LOCs could indicate increased risk to them. Banks look at overall balance fluctuations and payments made which are now generally visible across creditors, especially on revolvers, to see whether a customer might be overextended were they to max out their LOCs. Making near minimum payments with 30% overall util is a lot worse than making payments that are 5x the minimums with 50% util. This would only be seen automatically by specialized analytics or by newer scores like VantageScore 3.0 that see the fine grain info and can assess risk based on similar patterns of people in the past.

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Interesting. So how do you know when you are near your overall exposure between all accounts? I know there are people on here with $100K+ of available card credit spread across many many cards...anyone ever run into this? I am up to about 11 cards and plan to consolidate a few but am worried about my limits getting too high and having something cut.

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Interesting. So how do you know when you are near your overall exposure between all accounts? I know there are people on here with $100K+ of available card credit spread across many many cards...anyone ever run into this? I am up to about 11 cards and plan to consolidate a few but am worried about my limits getting too high and having something cut.

It's hard to say since each bank has various strategies and these days CLDs can occur instantly if banks don't like what they see charge by charge. Back in the 80's I had around 80k over my three CCs and I had lots of lates as I would typically PIF plus add enough to carry me two or three months then wait till I got red envelopes and repeat. I hated the process of paying bills which is largely why I switched to a debit card and eventually lost my CCs when they expired without use.

 

If I was a bank I'd look at the total paid each month, calculate the minimums if one was maxed out on everything, and if the payments actually made exceed the minimums by some, bank defined multiple (perhaps 2 to 5x), not see the exposure as too risky.

 

However, it's all statistical analytics and a bank will set that multiple based on their own experience with other past customers.

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I am over 100k in limits now, visibly. I was over 100k a while ago, but one 15k TL was hidden. I make 50k a year, so I think if there was going to be AA, it would have happened by now. Heck, Chase gave me a card with a 10k TL on top of the 15k hidden TL I already had with them, and didn't bat an eyelash. I think if you grow your limits slowly, it may be just seen as the result of maintaining good credit and low balances.

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That is good to know. I have good income and a long relationship with Chase but am now getting lots of love from Citi. Was worried that the sudden increase in credit lines from Citi might cause problems with my Chase accounts.

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If anything chase might start matching Citis love as they are known to match other creditors in trying to get you to keep spend on their cards.

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