too much credit available?

Question

me and my boyfriend are having a disagreement... maybe you can help. I have 2 credit cards, one with a 10k credit limit and one w an 8k credit limit. I have never even come close to maxing them out, never even used 50% of available credit. I do carry a balance but always pay ontime, never missed a payment. He claims that having 18 k in credit will prevent me from getting loans in the future bc of my spending "potential".... i think that bc i always have kept my revolving balance low and pay on time it is fine. (also I have student loans and a car loan that i also have always paid on time) who is right??? Also, would it effect my credit score negetively if i paid off my cards and asked them to drop the limit??

Answer 1

Available credit is not debt no matter how you look at it. If it was, it would be called available debt.

It would hurt your scores if you requested a credit limit decrease. You would be negatively raising your overall utilization.
Even though you carry a low balance on your cards, you would still have to factor in the utilization on your loans.

It is a misconception that high credit limits or having higher credit limits overall that exceed a persons annual income is a bad thing. It's actually quite the reverse - "as long as the accounts are continually kept in good standing"

That's not to say there isn't the "occasional" lender that believes in that same misconception, because there are a small few that do.

But, when a person takes care of their credit, has high scores and even has high credit limits, that one lender who believes available credit is debt does not matter. There are many lenders, who don't believe available credit equals debt, waiting in the wings ready and willing to not only give that person a loan but to also give them the best rates.

Answer 2

I would not ask to drop the limit because the more available credit you have the better your credit score. As long as you are not spending beyond your means it is very good to have that much available credit. Lenders look at that in a good light not a bad one. You might want to consider paying off your loans with one of the cards as long as it has a low interest rate. That will boost your credit also as it will show that loan paid in full.

Answer 3

How do you decide how many credit cards to own? There are reasons to have more credit cards, and reasons to have fewer cards. Here are reasons to own few credit cards:
1. Each time you open a credit card, 20 points are taken off your credit score.
2. It is easier to manage your finance if you use only one or two credit cards. The more credit cards you have, the bigger risk of damaging your credit you carry.
3. If you have more credit cards, you should check more credit statements for errors.
Here are some reasons to use more than one card:
1. The first reason is credit card acceptance. May be American Express Blue credit card satisfies your requirements. But many merchants don't accept this card, so you'll probably want a Visa or MasterCard as well.
2. Different cards offer higher rewards on different types of purchase, for example, some credit cards offer higher rewards on gasoline. So if you have several credit cards you can make the most of rewards you get.
So how many credit cards should you hold? Most experts say there is no magic number. It depends on the amount of effort and time you are going to devote to saving money. Never use more credit cards than you can manage. It is much more better have positive crredit history. Besides if you open too many accaunt bank can decide your already have enaugh and don't give you money.
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Answer 4

Though I hate answering questions about credit, (everyone seems to have their own answers), I have to answer this one.
Some answers here are not right. The folks who said that "Credit Potential" won't hurt you are RIGHT !!! It is actually a good thing in the eyes of credit bureaus to have a good amount of credit. It will NOT lower your credit score. What will lower your score is late payments, charge offs, defaults and such. Also too many inquiries. Every time you apply for a new loan or new credit, your score is checked and to many of these will lower your score. So if you have credit, DO NOT reduce it or cancel it. Cancelling it can actually LOWER your score. So keep the credit you have, and be responsible.....

Answer 5

You shouldn't ask to drop the limit. Keep the utilization low on the cards. The only time that you have too much credit is when you do not make enough money to afford the cards balances. A lot of the larger creditors will ask for income verification.

Answer 6

lenders will strengthen your limits while they word which you will take care of to pay for to make your money. i've got maxed out a $4000 credit card and payed it off in a month. They immediately greater beneficial my decrease to $6500.

Answer 7

some places look at how much credit you have,.....even though you have not used it, the chance is there that you could,.....how ever you have always paid the credit, and that counts for something,..... your credit score will not be affected on how much credit potential you have, but the lender might look at how much you could have,.....and that could effect how much they will loan,.....hope this info helps you, if not contact me,.....

Answer 8

he's right.
they don't care how much you've previously spent or have spent it's what you might possibly spend that worries them.
ditch your 10k card and you'll be fine
you don't need that much credit card anyway you'll only get yourself into trouble.