Credit Limit Differences

Discussion in 'General Discussion | Credit Cards' started by vickers, Sep 26, 2015.  |  Print Topic

  1. vickers

    vickers Gold Member

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    I have often wondered what criteria is used when determining credit limits on new cards, and I think I have a good situation to compare....

    Bit of a background... I have been playing this game since I registered for this forum, around 2 years. I do not have any credit card balances. We just have a mortgage and car payment in terms of credit (and the cards I churn/keep). I am 33, so average age of account isn't that high. I didn't realize before this site that keeping older cards was good for your credit, but I do now. According to Barclay's, my FICO score is 736 (updated about a month ago).

    I have never done business or had any accounts with Bank of America or Discover, until last week.

    On the same day, I applied and was approved for both the Bank of America Amtrak World MasterCard and the Discover IT Miles cards.

    Bank of America credit limit = $1,000 (this is the lowest initial credit limit I have had since my teens)
    Discover credit limit = $9,000

    Thoughts on the large difference between these banks and why there is such a large difference between these two initial credit limits. Thanks.
     
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  2. dayone
    Original Member

    dayone Silver Member

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    BofA has more conservative credit practices?
    BofA uses a different credit bureau than Barclays (and Discover) so your FICO is lower?
     
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  3. daninstl

    daninstl Gold Member

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    I have had very generous credit limits with BofA. Much higher than Barclay. I have 3 Alaska cards and a Spirit card with BofA with $15k limits. My 2 current Red AA cards with Barclay have $5k and $12k I think. For my US Bank has the lowest I've seen on my accounts. Sad considering US Bank has been my primary checking bank for 30+ years through various names and mergers and I typically have a fairly high balance in my US Bank accounts.
     
  4. NYCUA1K

    NYCUA1K Gold Member

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    Here are a couple of considerations that determine the size of the initial credit line that a card issuer may be willing to extend:
    • Good credit score and a long credit history ensure large initial credit lines:The last credit card I applied for this year was the no-fee Citi HHonors visa card (after I got rid of the HHonors Citi Reserve). I had a FICO score of 820 and a credit history that started in1986 and I got a rather large credit line of $22K.
    • The total size of one's credit line across multiple cards with the same credit issuer may limit the initial size of credit line. The previous credit card I'd applied for prior to the one above was the Chase Marriott visa, when I already had 4 Chase cards (the original UA MileagePlus visa, the UA Explorer visa, and the United Club visa; and the Chase Hyatt visa). I was not approved instantly despite having a great credit score because, I was told, Chase needed to figure out the size of the credit line to extend to me. When I finally got the approval letter, they had decreased my Hyatt chase credit line, which was at $28K, to $18K and issued me the Chase Marriott visa with a credit line of $10K, i.e., the $10K that they had decreased the Hyatt visa CL by. This means that I had already reached the ceiling of the total credit that Chase was wiling to extend to me across multiple cards. Any new cards would be issued at the detriment of the credit line of another card.
     
  5. alfagirl

    alfagirl Gold Member

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    It seems like Chase offers me the highest initial credit limits (and I had no prior relationship with Chase). Just got a Chase Hyatt visa card and the limit is $37k. I called to cancel my Chase UA MileagePlus visa card and they offered to transfer that credit line (this one only $35k) to my Chase Hyatt visa card (I declined). They seem to be on the opposite end of the BofA practice.
     
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  6. vickers

    vickers Gold Member

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    This is an interesting view, thank you all for your inputs. It is interesting the initial amounts everyone receives and their history. Barclay and Discover have been very generous with their initial credit limits, while Chase, Citi, and BOA are on the lower end.
     
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  7. swazzie

    swazzie Silver Member

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    Of course your stated income is also a big factor in how big your credit line is--the bigger the income, the higher the limit may be.
     
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  8. NYCUA1K

    NYCUA1K Gold Member

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    Absolutely. One's income is also an important determinant of the initial credit line that one gets...
     
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  9. edekba

    edekba Gold Member

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    This could be in part due to Chase/Citi/BoA "dominance" in the credit card space so they could be looking to lower their potential liabilities vs. Barclay/Discover who want more people to use their cards...

    On another note; its not just CL that you should look at. The APR is also very telling of their "trust" in you. (Though we shouldn't be getting new cards and debt if we can't pay off our balances but that's another story.) Example: Chase is my primary checking relationship for the family, we pay all of our bills from it but our DD goes into our individual accounts and we transfer in a predetermined % amount into that account. Every time we apply for a Chase card we get the lowest listed APR (15.99% I believe?). I've also had a relationship with Amex for more than 10 years and also get the lowest APR.

    I just got a Citi TY card, with a CL lower than what I normally get and a sky-high APR of 22.99%. My only other relationship with Citi is a AA (3yrs back with a CL of $5k & Citi HHonor Reserve with $10k Limit. Both of those cards APR are also higher than 20%.)
     
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  10. NYCUA1K

    NYCUA1K Gold Member

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    Sounds like you still have a lot of room under your total credit line ceiling with Chase...
     
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  11. satman40

    satman40 Gold Member

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    I have seen Citi give me a low amount, only to give me a much higher amount on the next card, back when the AA EXec Card was hot, I ended up with 5 of them,

    Chase has moved CLs on me as well as Amex, but who cares we are only going to spend so much anyhow, and that is what I tell them, I apply for the perks.

    I have raised the limits on my keeper Amex Card.

    I have never paid interest on a CC, even in my younger days.
     
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  12. alfagirl

    alfagirl Gold Member

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    Yes. what to do, what to do.....:eek:
     
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  13. Miles
    Original Member

    Miles Silver Member

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    My experience with BOA is similar to the OP's. BOA granted me a $1000 CL (same on two separate cards), other banks give many times that amount. Weird.
     

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