How much is to much Credit?

[SaprykinPWNSjoo]

So I have a question for the wise members of Calgary puck. How much credit is to much credit and will it actualy go against you. I always thought that the more they can give you, that you can pay off the total amount each month and not go into dept was a good thing, but is there a line that having lots of available credit will go against you? If so what happens when you reduce your credit cards to a lower limit does that make it harder to apply for higher limits of credit in the future? Or is it good to have a high limit for a while maintain it and then lower it before you really need it.

Jordan

[ken0042]

As little credit as you need is best. When somebody pulls your credit report, it shows what you owe, and what your limit is. So as an example, you may be applying for a mortgage for a $300K house. If they look and see that you have $50K available to you in credit; they know that you could end up on the hook for more than you might be able to afford.

I keep 2 cards; just in case something happens to the one bank- like a computer malfunction or something. What creditors look for is how you pay off past credit, and how much you owe or potentially owe to others.

[CaptainCrunch]

The only thing that I owe is a little bit on two credit cards. I paid off everything that I can as quickly as possible.

I had credit problems when I was young and stupid and everyone was throwing credit cards and store cards at me, and I ram my self into a crater.

It takes forever to rebuild good credit after you get yourself out of that hole.

[zukes]

If you are paying everything off it should be okay, however if your credit report gets pulled a whole bunch of times (i.e. every time you go for a loan, credit card, mortgage etc.) then you will be labelled as a credit seeker regardless of whether you take the credit. I guess that is not good.

[zukes]

Originally Posted by CaptainCrunch

The only thing that I owe is a little bit on two credit cards. I paid off everything that I can as quickly as possible.

I had credit problems when I was young and stupid and everyone was throwing credit cards and store cards at me, and I ram my self into a crater.

It takes forever to rebuild good credit after you get yourself out of that hole.

This is exactly what happened to me in University. I got credit cards offerred to me from everywhere. I only worked during the summer, and the odd scrap job here and there during the school year, so they were maxed. I eventually got them paid off after they went to a collection agency and thought I had cleared everything. 5 years ago I head into my bank looking for a small loan to buy an engagement ring and get denied because I defaulted $42 on a credit card about 4 years earlier that they had to write off. I was never notified or anything.

Now my credit is clean but that was put over my head everytime I needed to borrow money.

[photon]

Depends if it's good credit or bad credit

Good credit, I can't get enough of it!

[fredr123]

The wife and I each have one credit card. Her visa has a limit of $4000 and has nothing on it. She pays it off the day the bill arrives. I have a visa with a $10k limit and there's nothing on it. She pays it off the day the bill arrives.

I tend to use my visa for any purchase greater than $20 just because I find it more convenient to use (e.g. restaurants). Since the balance is paid off in full each month, I don't *think* it's hurting me.

I was thinking of switching to, or getting an additional, Mosaic Mastercard with Airmiles rewards just so that I can benefit a little more from my credit card use...

[SaprykinPWNSjoo]

currently I have a 10 000 card and a 3500 card I only use one and pay it off every month. Since I bought a condo I thought it would be good to have cards as just in case situations. I don't have to worry about mortgage being affected by the cards as my parents co signed with me so thats not a problem. Should I lower the limits? Or just keep it for the just in case and If I do need say a loan or anything of that sort to lower them or cancel them at that time.

[Slava]

I have a card that I pay off every month as well. The limit is $10k. Not that I'm a huge spender, but I wouldn't want to go less than that. I use it for all of my monthly spending, and collect the points (mine collects worldpoints).
Basically you are using their money for free for a month...so its a good deal. Its also safer than debit.

[fredr123]

Forgot to mention, but my wife has a kickass line of credit with a low credit rate. Whenever we run into one of those "oops" situations (like when rent and car payments are due before pay day or when you need a new computer ) we just use that until we can get things straightened out. Much better than using a credit card... I think.

[Slava]

Originally Posted by fredr123

Forgot to mention, but my wife has a kickass line of credit with a low credit rate. Whenever we run into one of those "oops" situations (like when rent and car payments are due before pay day or when you need a new computer ) we just use that until we can get things straightened out. Much better than using a credit card... I think.

Well if you are going to pay the credit card right away then use that...then there is no interest. Most lines of credit will calculate the interest daily?

[fredr123]

Originally Posted by Slava

Well if you are going to pay the credit card right away then use that...then there is no interest. Most lines of credit will calculate the interest daily?

True. But there are a few times, like when we went on vacation, that we weren't able to pay everything off right away. We used the LoC for that but paid it off as soon as we were able. Prime + whatever % we get on the LoC is better than most credit cards out there, right?

[Bend it like Bourgeois]

Originally Posted by photon

Depends if it's good credit or bad credit

Good credit, I can't get enough of it!

Agreed.

I don't think available credit matters, it's what you do with it.

A friend has well over 100k in available credit card space alone, for that reason.

Any chance to make money through credit he takes, and he's gotten quite creative (and done well).

To my knowledge he has never had a credit issue despite having huge (largely unused) credit.

I have gobs of credit I hardly touch and have never had an issue with it. I use few grand on points cards each month but it's always paid off.

[Hemi-Cuda]

i always found it strange when i hear of people saying they were offered so much credit when they were young, because i was never offered any. in fact i didn't have my first credit card until i was about 21 or so and i had to have my dad cosign just so i could get a small $500 student card as i was rejected every other time i tried to apply for one

[ken0042]

HC- what happened 6 months after getting that card?

Me- I lied about my age and got a Sears card when I was 16. By the time I was 17 I had a Visa and a car loan. By 18 I had every dept. store card, and by 22 I was in trouble.

[Hemi-Cuda]

Originally Posted by ken0042

HC- what happened 6 months after getting that card?

Me- I lied about my age and got a Sears card when I was 16. By the time I was 17 I had a Visa and a car loan. By 18 I had every dept. store card, and by 22 I was in trouble.

nothing. i used it as much as i could to build up credit, but i always paid everything off as soon as i saw a balance appear on my online banking to avoid interest. still never got any card offers. it wasn't until i got my second card (petropoints mastercard that i still had to apply for myself) and started using it regularly that got the odd credit card application form in the mail. and now with perfect credit (my step-mom is a bank manager for Scotia, she checked) i still only get one application every few months or so

i think it may be because i've never paid a dime to any credit card company or banks for my credit. both my cards are no annual fee and i've never paid any interest on either, so maybe the credit card companies have no incentive to try and get me as a customer because i've never owed any of them anything

[Dion]

Originally Posted by Hemi-Cuda

i always found it strange when i hear of people saying they were offered so much credit when they were young, because i was never offered any. in fact i didn't have my first credit card until i was about 21 or so and i had to have my dad cosign just so i could get a small $500 student card as i was rejected every other time i tried to apply for one

When I graduated from college I was offered credit cards from everyone under the sun. At the time I thought it was odd, especialy since most graduating stidents don't have alot of money. Yet when I applied for one while in college they denied me.

[ken0042]

Originally Posted by Hemi-Cuda

nothing. i used it as much as i could to build up credit, but i always paid everything off as soon as i saw a balance appear on my online banking to avoid interest. still never got any card offers.

Ah, that's the key then. Because you never carried a balance; they never reported you to the credit bureau.

When we get summer students I tell them to buy something for like $100, then take 4 months to pay it off. At that point you are establishing credit. For some reason card companies don't always report you if you always pay it off in full- which I don't get. They are still lending you money.

[Flames_Gimp]

am I the only one here with a high visa limit that is maxxed?

[Hemi-Cuda]

Originally Posted by ken0042

Ah, that's the key then. Because you never carried a balance; they never reported you to the credit bureau.

When we get summer students I tell them to buy something for like $100, then take 4 months to pay it off. At that point you are establishing credit. For some reason card companies don't always report you if you always pay it off in full- which I don't get. They are still lending you money.

well also i have friends with cards who will get their credit limit automatically raised, yet i've had both cards now for over 3 years and not once have i had either bank offer to raise it for me (i needed to get my mastercard raised to $5000 which they did, but only after i phoned and asked)