“Toy” Limits – Huge Credit Lines, What’s the Point?

DWQA Questions“Toy” Limits – Huge Credit Lines, What’s the Point?
rioteotonsingma asked 4 years ago

I’m just curious what opinions are.  I just read in some other thread that someone thought $ 2,000 was a “toy” limit.  It might be for that person if all their other cards are in the 5-figure range.


But that got me thinking … what’s the point of getting a bunch of credit cards to very high credit limits when you really can’t use a substantial portion of that credit without the risk of dropping your score significantly and/or watching credit card companies reduce your limits and close your accounts (as I’ve read can and does happen) — not to mention going into significant debt with potentially nasty interest payments.


I know that everyone will have different requirements for available credit depening on their personal situation — spending habits and expenses, whether or not you have kids, income, etc.


I’m single, make $ 70k, and don’t have much debt.  For me, the most I can imagine wanting is somewhere around $ 7500 on a single credit card.  That would allow me to comfortably spend $ 2500 in a single month without raising red flags, keeping my utilization at 30% or under, and that would be a pretty big month for me.  A couple cards like that, and I think that’s probably all I would want.  Right now, I have a total of around $ 26k in available credit (some of which are store cards … $ 4k at J Crew, which I will never, ever approach using).  Eventually, my profile will change as my scores go up, and I do plan to have 2-3 higher limit cards, and that’s it.  As it is now, I have plenty of credit available in any given month, but I’ve moved all my spending to one Discover card, and it would be nice to see that limit go up from its current spot at $ 2300.  I just got it a couple months ago, already received a CLI of $ 500, so I’ll just be patient and hope it will grow over time.  But if it gets to the range I mentioned earlier, I’d be perfectly happy.


So, what’s the point of a $ 20k or $ 25k credit card if you’re not really able to use that or don’t want to?  (Or in my case, even a $ 10k credit card — what would I put on that that I would actually want to go into debt for?)  Aside from bragging rights (which is irrelevant), what are good reasons for wanting such high limit credit cards?



BTW, sure, I understand if you make $ 500,000 a year, you’re naturally spending more money.  I’m referring specifically to the situation I see here where people are making my income, slightly higher or lower, and want $ 100k or more in available credit on cards.  Why?




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