Poll: Available Credit Percent

[sengsational]

I started playing the credit card bonus sign-up game and the amount of credit for both me and DW has gone up by 30% in the last few months. So I got to wondering if my amount of debit + potential debit is in the normal range, or more "out there".

The numerator for ratio of the poll is the sum of credit limits of all cards (both parties if married) plus the outstanding balance on mortgages and other loans, plus credit limit on HELOC. So basically, if you "went nuts" and maxed out every source of cash you had, and added that to what you also currently owed, what would that total be.

The denominator, for simplicity is 4% of your assets plus non-investment income. So add-up the value of all income producing assets and multiply by 0.04. Then add to that any money that comes in the door that is NOT from assets, such as Social Security, defined benefit pensions, and w*rk.

For me, this number is 108%, up from 82% in the last few months due to two new credit cards. After reading about what CC issuers look at, they certainly look at "income", which I know we all have our own way to define that for the purposes of the application, but we don't need to go there. The point is that I didn't see that the ratio of this poll (available credit divided by income) was listed as a primary factor in whether to award a credit card. It seemed more about the credit score. But maybe this ratio affects the credit score? I wonder if there's a "sweet spot" for this ratio.

 

[Sunset]

While I appreciate the anonymity of the calculations it's way too weird and frankly full of holes.

For example I tell the CC companies my income is $110K/yr (it's a totally made up number, and my real income is a totally made up number which has zero relationship to my spending as it includes Roth conversions and other reasons).

The credit bureau or company does not know the value some of our assets, which produce no income, so it's off their radar.

Then of course it depends upon Spouse playing the game, and my DW does not like to play as much as I do, so her total credit available is less than mine. I don't even know what it is.

I recently saw my total credit available via CC and it's weirdly about $112,000
I have zero other debt.

Based on a responsible person with an income $110K, I should be having credit limit of $330K, so I guess I have room

 

[W2R]

For me, this number is 108%, up from 82% in the last few months due to two new credit cards.

For me, the ratio is 7%. It is lower because my very strong personal preference is to not be indebted to anybody. I do have an Amazon Visa card, and I get offered other credit cards but I do not want any more. Other than that card, which I do not fill up and pay off every month, I owe not one cent to anybody; no mortgage, no HELOC, no loans. And why? Because that's what makes me happy.

 

[davebarnes]

I am playing the points game for Avios. Every time I get a new card, they give me a $20K spending limit. But, then I am also dumping cards after the initial signup bonus.
It is all so silly as the current total charges on our cards is about $5K/month.

 

[RobbieB]

Four hundred and sixty percent.

 

[euro]

For me, the ratio is 7%. It is lower because my very strong personal preference is to not be indebted to anybody. I do have an Amazon Visa card, and I get offered other credit cards but I do not want any more. Other than that card, which I do not fill up and pay off every month, I owe not one cent to anybody; no mortgage, no HELOC, no loans. And why? Because that's what makes me happy.

 

[SecondCor521]

623.7% according to the OP's definitions - I play credit card games. But I'm only using approximately 1% of my total CL at the moment, and it's usually about 50% less than it is right now.

But I also don't like to be indebted, so I understand W2R's POV.

My experience tells me that the CC companies will extend themselves to a certain percentage of your reported income (often 100% to 150% of it). But if you try to get more total credit line, they will decline you and give a reason of "already sufficient credit" or some such. If you really want another card with the same company, either call ahead of time and reduce your CL with them, or call the reconsideration line and offer to shift CL from an existing card to the new one for which you're applying.

And if you have a high score with high limits with CC company X, then CC company Y will tend to give you a high credit limit - I think because some people view a high CL as representing status and it matters to them. So CC company Y is trying to shift your business to them.

I've never seen CC companies declining due to too much overall CL for income. I think the "max everything out and move to Central America" strategy doesn't happen very often, and if it did then any individual CC company only cares about their exposure to you, not the totality of CC companies' exposure to you.

 

[ziggy29]

623.7% according to the OP's definitions - I play credit card games. But I'm only using approximately 1% of my total CL at the moment, and it's usually about 50% less than it is right now.

But I also don't like to be indebted, so I understand W2R's POV.

Close to 500% here. For the most part it's just old credit cards with $10K to $25K limits, and I rarely charge more than about $2,000 a month (paid off each month with 1.5% cash back).

And I have a mortgage for tax reasons (my wife is a pastor, so she gets a housing allowance -- some of her income is exempt from income taxes if used for housing). Thus, our mortgage payment (and utilities, insurance and maintenance) add up to an allowance that is not taxed as income (but self employment taxes apply to them, so being clergy isn't all fun and games where taxes are concerned). We could pay off it we needed to, but as long as we have this tax perk, it's in our best interests to use it.

 

[Another Reader]

Add the unused HELOC to the mortgages for all the properties and silly amount available on the credit cards and it's a bit over 5 times the income after all rental expenses. However, if I started using all this credit, I'm sure there would be raised eyebrows and lowered limits as lenders saw the pattern.

 

[audreyh1]

OMG I have so many credit cards I don’t think I can add them all up!

So we are supposed to use 4% of investable assets plus annual SS or pensions as the denominator, and add up all the credit limits of our credit cards plus other unused credit as the numerator?

 

[sengsational]

Right Audrey, those are the specs, for good or ill. I just copied the numbers off the most recent credit reports. I went through the previous reports and it was exactly the same except for the two recent cards, so the most recent reports are all that's required.



This thread, even in it's first few hours, been very helpful to me, seeing that CC gamers are way higher than we are. Lots of room between 100% and 500%! I didn't expect to see the top categories start getting votes. But such is the way of polls... chicken and egg problem.


The poll is "weird", but as noted, I didn't want to be too intrusive on an individuals or couple's finances.

 

[Red Badger]

What? No bacon? I'll sit this one out.

 

[Badger]

For me, the ratio is 7%. It is lower because my very strong personal preference is to not be indebted to anybody. I do have an Amazon Visa card, and I get offered other credit cards but I do not want any more. Other than that card, which I do not fill up and pay off every month, I owe not one cent to anybody; no mortgage, no HELOC, no loans. And why? Because that's what makes me happy.

+1 We have 2 cards. One for everyday and one for Costco and gas. Both are paid off every month. Since we froze our credit it is just too much of a pain in the neck to turn it off and on just to obtain another CC or take out a loan so we either pay with the CCs we already have for the points or pay cash.


Cheers!

 

[mrfeh]

+1 We have 2 cards. One for everyday and one for Costco and gas. Both are paid off every month. Since we froze our credit it is just too much of a pain in the neck to turn it off and on just to obtain another CC or take out a loan so we either pay with the CCs we already have for the points or pay cash.


Cheers!

+2

Only 2 CCs here, no mortgage, portfolio in the low 7 digits.

 

[Cobra9777]

We have 3 active cash-back credit cards: Amazon/Chase 5%, AMEX Blue Cash 5%, and Fidelity/Elan 2%. We also have an older VISA that lives in a sock drawer. As defined by OP, our available credit is 61%. As a percent of actual spend, it's 75%.

 

[sengsational]

Since we froze our credit it is just too much of a pain in the neck to turn it off and on just to obtain another CC or take out a loan so we either pay with the CCs we already have for the points or pay cash

I'm pretty good at it. TU and Experion on the web and Equifax on an automated phone call...takes about 10 minutes all 3. I've got LastPass filling out the forms. If it weren't for the broken Equifax site, it would be about 5 minutes.

 

[scrabbler1]

About 36% here. I have two CCs, each with less than $10k limits. I rarely exceed $1k in CC charges in a given month, so the second card is just a back-up card I use once a year to keep it active.

 

[Independent]

The last time we borrowed money was in 1981 when we bought a house. We paid it off in 15 years.

We use one credit card for gasoline and online purchases, but always pay it in full at the end of the month.

Our credit used plus credit available is a non-issue in our financials.

 

[skipro33]

I got my credit limit total for all cards from CreditKarma website. It shows both Exqufax and TransUnion say I have $122,000 in credit card limits and use 2% of that (paid in full each month)

My income all totaled from our own investment accounts, Social Security and Pension total $108,000 a year. So, 130 / 108 comes out to 1.2%. Is that right?


CreditKarma also says I have 6 credit cards averaging 7 years old, the oldest over 23 years old, 1 car loan and 1 RV loan. Both also give me a credit rating of 822 out of a possible 850.

 

[SecondCor521]

^ 130 / 108 = 1.2 = 120%

 

[skipro33]

^ 130 / 108 = 1.2 = 120%

Ha! I just realized that I didn't finish the math as a ratio, came back and found your correction. Thanks!

Now I gotta change my vote in the poll, if possible.

 

[sengsational]

My experience tells me that the CC companies will extend themselves to a certain percentage of your reported income (often 100% to 150% of it). But if you try to get more total credit line, they will decline you and give a reason of "already sufficient credit" or some such. If you really want another card with the same company, either call ahead of time and reduce your CL with them, or call the reconsideration line and offer to shift CL from an existing card to the new one for which you're applying.

I already had two cards with Barclay and they only allowed a third if I moved some CL to the new card from the old cards. They asked about my work (was in there as "engineer"). I said "investor" and they offered "author" hehe! They also offered "retired", but I don't like the title. We settled on "investment advisor". I arbitrarily put $90K income on the application and with an 800 score they're offering "only" $25K total across all cards. But my new card is on the way!

 

[kgtest]

I owe a lot on my mortgage. I have about 150k of just pure credit card credit line, they keep upping it. I have about the same in equity. Technically, last month I think my net worth finally went positive for the first time since I had been renting for a bit about 5 years ago.

 

[MarieIG]

For me, the ratio is 7%. It is lower because my very strong personal preference is to not be indebted to anybody. I do have an Amazon Visa card, and I get offered other credit cards but I do not want any more. Other than that card, which I do not fill up and pay off every month, I owe not one cent to anybody; no mortgage, no HELOC, no loans. And why? Because that's what makes me happy.

Right now, it's about as low as you can go. My CCs are paid as soon as the charges land. I don't wait for the statement. I don't have a ton of credit and am not seeking more. No HELOC and none wanted.

However, DH is plotting to change that. He thinks it is a great idea to finance a vehicle.

 

[CyclingInvestor]

9%, 1CrCard