Reply to What is the credit limit on your credit card?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]8k, but I have never sought out an increase.

Curious - why would people have such high 50k+ limits? Do you ever spend to that level in a month? Is there another benefit? [/quote]

Besides needing it, another reason is that a high, and unused, credit line is good for your credit rating.  If you've got a $10k limit and you routinely put $5k on it each month, even if you pay it off, the credit bureaus will see that you've got an average of 50% of your credit being used and interpret that as you're in need of credit to get by.  Alternatively, if you've got a $50k limit and use $5k, you only consume 10% of your available credit and bureaus look at you more favorably.  It's called your "credit utilization ratio."  It's kind of preposterous that it's such an influence on credit scores, but to a large degree, bureaus believe that if someone's willing to give you a high limit and you don't use it, then you're a low credit risk and thus get a higher score. [/quote]

Thanks for this explanation! I found it very helpful. (I'm the pp who asked). [/quote]

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