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  • High credit card limit good?

    I was recently approved for the Fidelity Rewards Visa Signature Card and they gave me a high limit of $17k, it was an online application so I just clicked accept because I do want the card but the limit they gave caught me off guard as I was expecting maybe $1.5k - $3k.

    My purpose for the card is because I have a lot of things I'm planning to do such as family vacations and other trips that I need to book months in advance, the trips are actually next year, and wanted to earn rewards on those purchases I'll be making regardless.

    I have accounts at Fidelity 401(k) and IRA so I get a 2% return when I deposit the rewards there. I have 3 credit cards already:
    - 2 from college days
    - 1 from my bank

    $2k CC debt ($1.2k on 0% card, the rest on another card because of the rewards I earned from the purchase)

    I just wanted some heads up advice that comes with getting this card.

    -LP

  • #2
    Our 2 Visa cards and 2 Discover cards have combined lines of over $80,000 I believe. My main card has a $32,000 line. My wife's credit score is a perfect 850. Mine runs in the 830s. So it doesn't seem to have an negative effect as far as I've seen.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

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    • #3
      As long as you stick to just making purchases that you were going to make anyway and pay the card off right away, the high credit limit shouldn't hurt you. Having more available credit makes you credit utilization ratio lower, which helps your credit score.

      But, if you can't pay off these trips you're planning as soon as you put them on your card, I'd suggest rethinking whether or not you should be taking them at all. The fact you're already carrying $2000 in credit card debt is a bit worrying. Maybe you can justify the $1200 at 0%, but I wonder what's stopping you from paying off the other $800?

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      • #4
        Originally posted by phantom View Post
        As long as you stick to just making purchases that you were going to make anyway and pay the card off right away, the high credit limit shouldn't hurt you. Having more available credit makes you credit utilization ratio lower, which helps your credit score.

        But, if you can't pay off these trips you're planning as soon as you put them on your card, I'd suggest rethinking whether or not you should be taking them at all. The fact you're already carrying $2000 in credit card debt is a bit worrying. Maybe you can justify the $1200 at 0%, but I wonder what's stopping you from paying off the other $800?
        The $800 is the one of the trips I just purchased, I enough cash to pay off the $2k, but I am slowly chipping away at the 1.2k until the 0% is over. The $800 I will pay, and I only need to pay half ($400) because I paid for a family member. Since it was 0% I wasn't rushing to pay it off, but keep it from getting higher as well.

        Your concerns do make sense though, will keep it in mind so I don't fall into the danger zone.

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        • #5
          They gave me a high limit as well, $25k. Honestly not even sure what the limit is on my other cards.

          Like the others have said, it is no big deal as long as you only charge what you can pay off.

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          • #6
            That seems to be the average limit between my three cards. You can always ask them to lower the limit, if you want. As long as you don't charge them up, a higher limit works to your advantage.

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            • #7
              I believe a high limit is actually a good thing if you are financially disciplined and want to maintain a low utilization ratio, which should help you improve your credit score even more.

              However, it would be a bad thing if you are not financially disciplined and is likely to just run it up with spending....

              There is also a small possibility that a high credit limit is bad if the card ever gets stolen, because then, someone can just run it up even higher.... However, I don't think you are on the hook for that if it ever happens, so I would not be too concerned about it though it's still worth mentioning I think.

              Personally, I like having a limit high enough to buy a car, which is currently around $20k to $25k, but that's just me.

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              • #8
                Originally posted by Tabs View Post
                Personally, I like having a limit high enough to buy a car, which is currently around $20k to $25k, but that's just me.
                If only the dealers would actually let you charge a car purchase. I've tried. They don't, of course, because of the processing fee on their end. They'd lose 2.5-3% of the price. I have heard of them letting you put down some money on a credit card, though. Usually not more than a few thousand.
                Steve

                * Despite the high cost of living, it remains very popular.
                * Why should I pay for my daughter's education when she already knows everything?
                * There are no shortcuts to anywhere worth going.

                Comment


                • #9
                  Yeah I put down a 4k payment once on a card to get the rewards points, but that was about as much as they'd go.

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                  • #10
                    Originally posted by disneysteve View Post
                    Our 2 Visa cards and 2 Discover cards have combined lines of over $80,000 I believe. My main card has a $32,000 line. My wife's credit score is a perfect 850. Mine runs in the 830s. So it doesn't seem to have an negative effect as far as I've seen.
                    How does one get personal a line of credit of 32K?

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                    • #11
                      I purchased a used 1997 Ford Ranger for $5000 using a credit card from a used car dealer in Anaheim, CA. The year was 2002 when I made the purchase. I remember the year because that is when I moved from Hawaii to California. Of course I paid in full the balance the following month when I received my credit card bill. Oh and I remember trying to haggle the $5000 price out the door without taxes but the dealer refused so with taxes it came to about $5500 total.

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                      • #12
                        Originally posted by disneysteve View Post
                        If only the dealers would actually let you charge a car purchase. I've tried. They don't, of course, because of the processing fee on their end. They'd lose 2.5-3% of the price. I have heard of them letting you put down some money on a credit card, though. Usually not more than a few thousand.
                        This I would like to do in the future when ready to purchase a car (with enough cash saved up and all to pay off the card). That would generate a nice chunk of rewards.

                        Comment


                        • #13
                          Update

                          Originally posted by phantom View Post
                          As long as you stick to just making purchases that you were going to make anyway and pay the card off right away, the high credit limit shouldn't hurt you. Having more available credit makes you credit utilization ratio lower, which helps your credit score.

                          But, if you can't pay off these trips you're planning as soon as you put them on your card, I'd suggest rethinking whether or not you should be taking them at all. The fact you're already carrying $2000 in credit card debt is a bit worrying. Maybe you can justify the $1200 at 0%, but I wonder what's stopping you from paying off the other $800?
                          I was able to pay off all these cards and take my trip (with some frugalness of course).

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