How much is to much Credit?

[Flames09]

The biggest thing you need to remember is every time you apply for a loan, credit Cards etc etc. if they are doing a credit check that is a hit against your credit...


I got one CIBC VISA as soon as I turned 18 with a $500 limit and used it as many times as I could by paying off the entire balance every month, within 6 months of having that card they moved that limit to $1000 and then by a year I was at $2000 with banks like TD, Scotia, RBC all offering me low interest rate (9.5% was the lowest offer I got) credit cards. What my banking advisors have told me is when you're young and if you're smart get as many cards as you can because once you hit the age of 25 .. they start taking longer and harder looks at you, and your income situation. Me, I'm good with credit cards now so I have 5 major credit cards (all VISA's), a few department store cards.

[Agamemnon]

Originally Posted by Flames09

The biggest thing you need to remember is every time you apply for a loan, credit Cards etc etc. if they are doing a credit check that is a hit against your credit...

This is something I never originally understood... when I first tried to get credit I must have filled out a dozen applications, not realizing the medium-term damage it would do to my credit rating. They really need to do more to educate young people about their credit rating, put it in school (maybe not in CALM since people don't pay attention in that class?). Pretty vital knowledge that I had no clue about.

[Flames09]

Originally Posted by Agamemnon

This is something I never originally understood... when I first tried to get credit I must have filled out a dozen applications, not realizing the medium-term damage it would do to my credit rating. They really need to do more to educate young people about their credit rating, put it in school (maybe not in CALM since people don't pay attention in that class?). Pretty vital knowledge that I had no clue about.

I'm in the same boat I didn't find out until I was 20 so I had applied at quite a few places, I pulled up my credit report and saw that they listed all the places I had applied, I asked my financial advisor about this and they told me that it wasn't a good thing that I had applied at so many places because every time I get a credit check done my credit rating gets a hit against.

[Vulcan]

I grew up in a different time. The only credit cards were maybe for stores or gas companies. I never bought anything on time because I didn't like getting locked in to my job. I worked on construction and made good money when I wanted and saved and paid cash for my cars, travel and anything else I could afford.
Later I got a family and bought a car on time and it established me enough to get a mortgage. Still no credit cards though untill they started sending me pre-approved ones. I wouldn't have bothered but it's become almost impossible to rent a car or book a room without one. Now on the internet, it's become a good way to shop. I have 3 cards and some debt on a low interest one but it's not a big deal for me.

I have a pretty high credit limit so if I'm given 6 months to live, it'll be hookers and blow. Somebody had to say it.

[BlackArcher101]

I have 2 cards... well, technically 1.

A mastercard that has a limit of $1000 since I got it years ago. Another is a visa, but I never called to activate the new one. Have never needed more and don't see the need in the immediate future. I only use it for monthly expenses like cell phones, paying bills, etc. It's then paid off before I even get a bill in the mail. Mainly just use it for points/air miles. My credit rating is excellent using this method over the last 7 years.

As for the question... how much is too much credit? The amount depends. Just don't forget that any credit can be used as part of your debt (even if you don't carry a value month to money on a card with $25,000 limit, they still count the $25,000 as potential debt) and is a factor in other credit applications. Had a friend that even though he had a fairly decent income, couldn't finance a new vehicle all because of a very high limit on a credit card. As to how much is too much? Who knows, it changes from one person to the next.

[RW99]

Originally Posted by Flames_Gimp

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

Nope 3500 isn't that high, but it's definitly something I should be fixing.

[Flames_Gimp]

Originally Posted by RW99

Nope 3500 isn't that high, but it's definitly something I should be fixing.

3500 thhats nothin lol

[RW99]

Originally Posted by Flames_Gimp

3500 thhats nothin lol

Well that's my VISA. Lets not talk about the rest of my debt And no, I didn't go to Uni

[Flames_Gimp]

just take your 3500 multiply by 55 and you have my debt lol

[Winsor_Pilates]

My friend who's a financial planner at CIBC told me that your available credit on a CC should only be as high as you need it. If you have a 10 000 credit and never spend over 1000, you should lower your limit.
I don't remember the exact reasoning, but he told me having really high credit card limits hurts your chances of securing loans etc.

[Dan02]

Originally Posted by Flames_Gimp

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

ask me again next April.

[Dion]

Originally Posted by Winsor_Pilates

My friend who's a financial planner at CIBC told me that your available credit on a CC should only be as high as you need it. If you have a 10 000 credit and never spend over 1000, you should lower your limit.
I don't remember the exact reasoning, but he told me having really high credit card limits hurts your chances of securing loans etc.

What does he have to say about lines of credit?

I was recently given a $25,000 line of credit from my bank without asking for one. I did sign up for it as I thought it might be useful in the future.

[V]

Originally Posted by Winsor_Pilates

My friend who's a financial planner at CIBC told me that your available credit on a CC should only be as high as you need it. If you have a 10 000 credit and never spend over 1000, you should lower your limit.
I don't remember the exact reasoning, but he told me having really high credit card limits hurts your chances of securing loans etc.

Huh, I've never had a problem with getting loans. I've got about 50k in available credit through credit cards alone. I've never had any problems getting credit.

Originally Posted by FG said

just take your 3500 multiply by 55 and you have my debt lol

Take that number, multiply by 4, and you've got pretty close to my debt load. Of course, the money I borrowed is making me money, and the interest rate is a long, long way from 18%.

[urban1]

There is a lot of information in this thread that is misleading, incomplete, or even completely wrong.

Theres a lot of good resources on the net regarding credit. Google is your friend. Or contact a professional. Remember that free advice is worth what you pay for it.

[ken0042]

Originally Posted by urban1

There is a lot of information in this thread that is misleading, incomplete, or even completely wrong.

Instead of issuing a blanket statement like that- how about adding something to the discussion. "You guys are all wrong" isn't adding much.

[GrrlGoalie33]

Originally Posted by urban1

There is a lot of information in this thread that is misleading, incomplete, or even completely wrong.

Theres a lot of good resources on the net regarding credit. Google is your friend. Or contact a professional. Remember that free advice is worth what you pay for it.

Google may or may not be more accurate than people posting their own experiences... pretty blanket statement for someone who seems unwilling to "correct the wrongs".

[flamesfever]

I believe your credit should expand as your need for it expands. I don't see any advantage in having credit you don't require.

I have found that it is important to establish a good working relationship with one lending institution, so that they are able to see how you conduct your affairs and are there for your when you need additional credit eg. require a mortgage to purchase a house, or line of credit to start a business etc.

How you pay your debts is a mark of your character, not that we all suffer from setbacks from time to time and have to adjust accordingly.

As for credit cards, I used to have many credit cards and found that the fewer the better. Now I only carry one card, and it makes things a whole lot easier to keep track of things. A while ago, while going to a Flames game, I mistakenly applied for another card in order to get a jersey. The card came and I never activated it. In spite of this it reduced my credit rating a small amount, and I understand will stay on my record for 5 years.

Establishing credit is a very important thing. Paying off your school loan in an efficient manner is a good start. Also, as others have suggested, educate yourself as much as possible with regard to financial matters.

[Slava]

Originally Posted by flamesfever

I believe your credit should expand as your need for it expands. I don't see any advantage in having credit you don't require.

I have found that it is important to establish a good working relationship with one lending institution, so that they are able to see how you conduct your affairs and are there for your when you need additional credit eg. require a mortgage to purchase a house, or line of credit to start a business etc.

How you pay your debts is a mark of your character, not that we all suffer from setbacks from time to time and have to adjust accordingly.

As for credit cards, I used to have many credit cards and found that the fewer the better. Now I only carry one card, and it makes things a whole lot easier to keep track of things. A while ago, while going to a Flames game, I mistakenly applied for another card in order to get a jersey. The card came and I never activated it. In spite of this it reduced my credit rating a small amount, and I understand will stay on my record for 5 years.

Establishing credit is a very important thing. Paying off your school loan in an efficient manner is a good start. Also, as others have suggested, educate yourself as much as possible with regard to financial matters.

I agree with what you are saying here...except that bolded statement in some cases. If you are self-employed or thinking of becoming self employed then its definitely a good thing to have!

[flamesfever]

Originally Posted by Slava

I agree with what you are saying here...except that bolded statement in some cases. If you are self-employed or thinking of becoming self employed then its definitely a good thing to have!

You are right. It's always good to have more credit than you anticipate needing in your business, just in case the unexpected happens. In this case, I would assume we are talking about a line of credit, with a reasonable interest rate.

I was referring more to the credit limit on credit cards, where the interest rate is extremely burdensome, if you fail to pay it off monthly. I think for some, the high credit limit on cards may offer the temptation to use it, and in so doing, get more and more in the hole with time. I've seen it happen time and time again.

[Slava]

^ For sure, we are on the same page here. A line of credit "just in case" when you're self employed is a great thing to have!