How do credit card companies determine credit limits?
Author: Guest
Posted: Mon Apr 12, 2004 12:20 pm
Post subject: Huge Credit Limits
Hello! I'm new to the board and have a question I have not seen addressed in previous posts. I look at credit bureaus all day and have seen some obscenely large credit limits extended to people I wouldn't lend a nickel to. Does anyone know how any bank of credit card company determines the initial limit granted to a customer? Any 'insiders' out there perhaps?
Thank you!
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Author: creditceo
Guest
Posted: Mon Apr 12, 2004 12:53 pm
Post subject: huge limits
First, CB's are going to look at your score. 680+ and you are in the game, primetime, meaning prime cards such as Amex, Chase, Discover, MBNA, Bank One, etc. This doesn't tell the entire story, but this is the start of the game. Then, they are going to look at what your current limits are, whether you own a home or rent, and lastly, your income. This is how it is determined. Things that go into your initial score you should already know such as utilization, total debt, payment history, mix of accounts, and inquiries. What type of limits are you looking for or curious about?
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Author: Guest
Posted: Mon Apr 12, 2004 1:05 pm
l, a few weeks ago I saw a person with a $71,000 limit from MBNA and I thought that to be very impressive. Although the credit was very clean, I thought the revolving ratio was a little high. Then, last week, I saw a bureau where the customer just opened an MBNA account with a $25,000 limit and really had no other comparable credit of any type. I'm just curious if there is some credit criteria factor (from any bank) that would make this type of limit make a little more sense to me. I haven't opened a new credit card in a few years -- and MBNA is looking pretty good about now.
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Author: mouse
Guest
Posted: Mon Apr 12, 2004 2:50 pm
Anonymous wrote:
Well, a few weeks ago I saw a person with a $71,000 limit from MBNA and I thought that to be very impressive. Although the credit was very clean, I thought the revolving ratio was a little high. Then, last week, I saw a bureau where the customer just opened an MBNA account with a $25,000 limit and really had no other comparable credit of any type. I'm just curious if there is some credit criteria factor (from any bank) that would make this type of limit make a little more sense to me. I haven't opened a new credit card in a few years -- and MBNA is looking pretty good about now.I have a couple of SMALLER accounts UNDER $25,000
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Author: Guest
Posted: Tue Apr 13, 2004 10:02 am
MBNA offers cards up to 100K with plat plus if your income can support it. It is not YOUR decsion to decide who should or should not have large limits. I have a couple cards around 25K, so what is the big deal? IF the debt ratio was sooooo bad, the banks would take action. Just because you wouldn't lend a nickel to that person with large limits does not give you the right to criticize banks that do............
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Author: Guest
Posted: Tue Apr 13, 2004 1:36 pm
The reason for my post was simple; to learn more about credit card company's initial limit approval guidelines. Guest, If you interpret that as a critical remark, you are an idiot, and should keep your retarded comments to yourself. It almost sounds like you took my post personally -- did the situation I'm speaking of sound like your own (a little overextended are we)? Have the banks already taken action against you? It is NOT my decision who receives credit, or how much credit is granted by any credit card company and I am NOT passing judgement. I'm only asking questions to learn more. Isn't that what this board is for?
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Author: Verne
SENIOR MEMBER (Member for 2 yrs.+)
Joined: 14 May 2003
Posts: 487
Location: Midwest
Posted: Tue Apr 13, 2004 3:43 pm
A lot of factors are considered when it comes to credit limits. From my experience two stand out after you've met all the other requirements: 1. Your existing credit limits 2. Your stated income (when applying for credit). Even though it often isn't verified, income plays a huge role in the establishment of the initial credit limit. When my income doubled almost overnight, I noticed a dramatic increase in starting credit limits although everything else had remained the same. What will get you a big credit limit, after you've satisfied them in other areas, is big credit limits elsewhere. Once I broke the $5,000 - $6,000 barrier, others followed suit. When I hit $10,000 with one card, others inched the limit upward and suddenly I was approved for new cards with a starting limit of $9500 or $9800. (Nobody wants to start you out with a limit that is above your highest elsewhere) But how do you prime the pump, start the feeding frenzy, or mix this many metaphors in one sentence you ask? If you want high credit limits the trick is to find a card (like GM) that is willing to give you higher limits than what you have elsewhere. After that, the whole thing snowballs and the other cards follow like lemmings.
Verne
Any agreement that can be changed at any time, for any reason, is no agreement at all.
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Author: Nathan
Joined: 09 Apr 2004
Posts: 7
Location: Arizona
Posted: Tue Apr 13, 2004 4:12 pm
Thanks for the response, Verne. Your insight is truly appreciated.
There are no stupid questions -- only stupid answers.
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Author: Guest
Posted: Tue Apr 13, 2004 10:52 pm
Overextended? Banks taking action against me? OK, believe what you want.
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Author: troll stomper
Guest
Posted: Fri Apr 30, 2004 2:11 pm
Anonymous wrote:
Overextended? Banks taking action against me? OK, believe what you want.
that poster really got your goat hahahaha
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Author: NightStar
Forum Moderator
Joined: 07 Nov 2003
Posts: 2135
Location: Illinois
Posted: Fri Apr 30, 2004 2:34 pm
When you complete the initial application for the card, it asks what your stated income is, or house hold income, depending on your answer sometimes determines what they will offer. This does not work for all creditors though, some of them want to see proof of the income claimed. Recently applying for Pulaski Bank card I learned that $20,000 income to them (verified) is only worth $2,000 credit limit combined... so if I already had $1500 with another creditor showing on the credit report - Pulaski would only extend me a credit limit of $500 - capping what I could have available. (This company also adds to their fine print, their ability to sell your account to another company should you fail to meet their standards) meaning that I don't think you can apply - then aquire more credit afterwards exceeding their cap without them no longer wanting you as a customer. Sad thing is they offer a FIXED 5.5% interest rate, and should they sell the account, you could end up with another creditor charging 18% interest.
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Author: geico
Guest
Posted: Fri Apr 30, 2004 3:09 pm
Lenders and borrowers do business based on trust. If borrowers don't break the rules, lenders won't think twice to increase credit limit. You don't have to earn a lot to get high credit line. All you need to do is " Don't abuse lender's trust". OK!!!!
View our latest credit card ratings!
Author: troll catcher
Guest
Posted: Fri Apr 30, 2004 3:17 pm
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Author: AgntSmith
Guest
Posted: Fri Apr 30, 2004 4:17 pm
Banks have their own policies in granting credit lines. If you are rich enough to own a bank, you set your own rules. Don't criticize others.
View our latest credit card ratings!
Author: Guest
Posted: Sat May 01, 2004 3:42 pm
Anonymous wrote:
MBNA offers cards up to 100K with plat plus if your income can support it. It is not YOUR decsion to decide who should or should not have large limits. I have a couple cards around 25K, so what is the big deal? IF the debt ratio was sooooo bad, the banks would take action. Just because you wouldn't lend a nickel to that person with large limits does not give you the right to criticize banks that do............
MBNA guide for 100k line for unsecured debt
1. Established credit with similar lines
2.THI of around 500k, stocks, liquid assets around 250k and no delinquency
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Author: Guest
Posted: Sat May 01, 2004 4:34 pm
Are you offering an opinion or do you work or otherwise have inside sources at MBNA to make this statement?
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Author: Charley
Guest
Posted: Fri May 07, 2004 3:05 am
Post subject: MBNA Reps
There used to be one or two MBNA people who would pop up on these boards in an unofficial capacity occasionally. If you search the old message board, you might be able to find their postings. It was good to have them around. They provided a little insight as to how MBNA worked inside. Like the criteria for a 100K credit line.
View our latest credit card ratings!
Posted: Mon Apr 12, 2004 12:20 pm
Post subject: Huge Credit Limits
Hello! I'm new to the board and have a question I have not seen addressed in previous posts. I look at credit bureaus all day and have seen some obscenely large credit limits extended to people I wouldn't lend a nickel to. Does anyone know how any bank of credit card company determines the initial limit granted to a customer? Any 'insiders' out there perhaps?
Thank you!
View our latest credit card ratings!
Author: creditceo
Guest
Posted: Mon Apr 12, 2004 12:53 pm
Post subject: huge limits
First, CB's are going to look at your score. 680+ and you are in the game, primetime, meaning prime cards such as Amex, Chase, Discover, MBNA, Bank One, etc. This doesn't tell the entire story, but this is the start of the game. Then, they are going to look at what your current limits are, whether you own a home or rent, and lastly, your income. This is how it is determined. Things that go into your initial score you should already know such as utilization, total debt, payment history, mix of accounts, and inquiries. What type of limits are you looking for or curious about?
View our latest credit card ratings!
Author: Guest
Posted: Mon Apr 12, 2004 1:05 pm
l, a few weeks ago I saw a person with a $71,000 limit from MBNA and I thought that to be very impressive. Although the credit was very clean, I thought the revolving ratio was a little high. Then, last week, I saw a bureau where the customer just opened an MBNA account with a $25,000 limit and really had no other comparable credit of any type. I'm just curious if there is some credit criteria factor (from any bank) that would make this type of limit make a little more sense to me. I haven't opened a new credit card in a few years -- and MBNA is looking pretty good about now.
View our latest credit card ratings!
Author: mouse
Guest
Posted: Mon Apr 12, 2004 2:50 pm
Anonymous wrote:
Well, a few weeks ago I saw a person with a $71,000 limit from MBNA and I thought that to be very impressive. Although the credit was very clean, I thought the revolving ratio was a little high. Then, last week, I saw a bureau where the customer just opened an MBNA account with a $25,000 limit and really had no other comparable credit of any type. I'm just curious if there is some credit criteria factor (from any bank) that would make this type of limit make a little more sense to me. I haven't opened a new credit card in a few years -- and MBNA is looking pretty good about now.I have a couple of SMALLER accounts UNDER $25,000
View our latest credit card ratings!
Author: Guest
Posted: Tue Apr 13, 2004 10:02 am
MBNA offers cards up to 100K with plat plus if your income can support it. It is not YOUR decsion to decide who should or should not have large limits. I have a couple cards around 25K, so what is the big deal? IF the debt ratio was sooooo bad, the banks would take action. Just because you wouldn't lend a nickel to that person with large limits does not give you the right to criticize banks that do............
View our latest credit card ratings!
Author: Guest
Posted: Tue Apr 13, 2004 1:36 pm
The reason for my post was simple; to learn more about credit card company's initial limit approval guidelines. Guest, If you interpret that as a critical remark, you are an idiot, and should keep your retarded comments to yourself. It almost sounds like you took my post personally -- did the situation I'm speaking of sound like your own (a little overextended are we)? Have the banks already taken action against you? It is NOT my decision who receives credit, or how much credit is granted by any credit card company and I am NOT passing judgement. I'm only asking questions to learn more. Isn't that what this board is for?
View our latest credit card ratings!
Author: Verne
SENIOR MEMBER (Member for 2 yrs.+)
Joined: 14 May 2003
Posts: 487
Location: Midwest
Posted: Tue Apr 13, 2004 3:43 pm
A lot of factors are considered when it comes to credit limits. From my experience two stand out after you've met all the other requirements: 1. Your existing credit limits 2. Your stated income (when applying for credit). Even though it often isn't verified, income plays a huge role in the establishment of the initial credit limit. When my income doubled almost overnight, I noticed a dramatic increase in starting credit limits although everything else had remained the same. What will get you a big credit limit, after you've satisfied them in other areas, is big credit limits elsewhere. Once I broke the $5,000 - $6,000 barrier, others followed suit. When I hit $10,000 with one card, others inched the limit upward and suddenly I was approved for new cards with a starting limit of $9500 or $9800. (Nobody wants to start you out with a limit that is above your highest elsewhere) But how do you prime the pump, start the feeding frenzy, or mix this many metaphors in one sentence you ask? If you want high credit limits the trick is to find a card (like GM) that is willing to give you higher limits than what you have elsewhere. After that, the whole thing snowballs and the other cards follow like lemmings.
Verne
Any agreement that can be changed at any time, for any reason, is no agreement at all.
View our latest credit card ratings!
Author: Nathan
Joined: 09 Apr 2004
Posts: 7
Location: Arizona
Posted: Tue Apr 13, 2004 4:12 pm
Thanks for the response, Verne. Your insight is truly appreciated.
There are no stupid questions -- only stupid answers.
View our latest credit card ratings!
Author: Guest
Posted: Tue Apr 13, 2004 10:52 pm
Overextended? Banks taking action against me? OK, believe what you want.
View our latest credit card ratings!
Author: troll stomper
Guest
Posted: Fri Apr 30, 2004 2:11 pm
Anonymous wrote:
Overextended? Banks taking action against me? OK, believe what you want.
that poster really got your goat hahahaha
View our latest credit card ratings!
Author: NightStar
Forum Moderator
Joined: 07 Nov 2003
Posts: 2135
Location: Illinois
Posted: Fri Apr 30, 2004 2:34 pm
When you complete the initial application for the card, it asks what your stated income is, or house hold income, depending on your answer sometimes determines what they will offer. This does not work for all creditors though, some of them want to see proof of the income claimed. Recently applying for Pulaski Bank card I learned that $20,000 income to them (verified) is only worth $2,000 credit limit combined... so if I already had $1500 with another creditor showing on the credit report - Pulaski would only extend me a credit limit of $500 - capping what I could have available. (This company also adds to their fine print, their ability to sell your account to another company should you fail to meet their standards) meaning that I don't think you can apply - then aquire more credit afterwards exceeding their cap without them no longer wanting you as a customer. Sad thing is they offer a FIXED 5.5% interest rate, and should they sell the account, you could end up with another creditor charging 18% interest.
View our latest credit card ratings!
Author: geico
Guest
Posted: Fri Apr 30, 2004 3:09 pm
Lenders and borrowers do business based on trust. If borrowers don't break the rules, lenders won't think twice to increase credit limit. You don't have to earn a lot to get high credit line. All you need to do is " Don't abuse lender's trust". OK!!!!
View our latest credit card ratings!
Author: troll catcher
Guest
Posted: Fri Apr 30, 2004 3:17 pm
View our latest credit card ratings!
Author: AgntSmith
Guest
Posted: Fri Apr 30, 2004 4:17 pm
Banks have their own policies in granting credit lines. If you are rich enough to own a bank, you set your own rules. Don't criticize others.
View our latest credit card ratings!
Author: Guest
Posted: Sat May 01, 2004 3:42 pm
Anonymous wrote:
MBNA offers cards up to 100K with plat plus if your income can support it. It is not YOUR decsion to decide who should or should not have large limits. I have a couple cards around 25K, so what is the big deal? IF the debt ratio was sooooo bad, the banks would take action. Just because you wouldn't lend a nickel to that person with large limits does not give you the right to criticize banks that do............
MBNA guide for 100k line for unsecured debt
1. Established credit with similar lines
2.THI of around 500k, stocks, liquid assets around 250k and no delinquency
View our latest credit card ratings!
Author: Guest
Posted: Sat May 01, 2004 4:34 pm
Are you offering an opinion or do you work or otherwise have inside sources at MBNA to make this statement?
View our latest credit card ratings!
Author: Charley
Guest
Posted: Fri May 07, 2004 3:05 am
Post subject: MBNA Reps
There used to be one or two MBNA people who would pop up on these boards in an unofficial capacity occasionally. If you search the old message board, you might be able to find their postings. It was good to have them around. They provided a little insight as to how MBNA worked inside. Like the criteria for a 100K credit line.
View our latest credit card ratings!
posted by CardRatings.com at 4:46 PM
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