Recently there have been discussions amongst my peers at various credit card issuers such as Chase, Citibank, and Bank of American about huge unsecured credit lines that extend well beyond the typical industry cap of $25K. I personally have a friend with a credit card with a $40K limit.

Asides from the bragging rights that come with such a huge credit line, there are various other benefits as well as disadvantages. My post today, I will try and list out the benefits and problems of these giant credit lines as well as a listing based on my personal professional experiences on how to best attain these large lines of credit on you credit card.

Benefits:

  1. You can brag to your buddies about you giant credit card line.
  2. When a great balance transfer offer comes along you can really take advantage of it and potentially put all the funds into a high yield savings account such as the ING Orange Savings Account that has 4.50% APY.
  3. A high line can improve your credit rating since part of your score is based on how high your utilization is (outstanding balance / total credit line). A huge line offsets the denominator in that equation and thus artificially suppresses your utilization. This can also have a negative effect which I will outline in the Disadvantages section below.
  4. Credit card issuers typically try and get new customers by matching or exceeding their existing highest line in their credit bureau. Thus, with one hight line, your likelihood of getting another new card with a high line increases as does your request for a increase in existing credit line.
  5. Bragging rights.

Disadvantages:

  1. An extremely high total unsecured line in your bureau can potentially negatively affect your score in the short term until you have proven that you won’t cash out the entire think and run to Indonesia. Over time this will stabilize and improve your score at a higher level given everything else remains constant.
  2. You may forget that you used the card for a bar tab on a drunken night out.
  3. If it’s a joint card with a partner, make sure you have a healthy relationship.

How to get the lines above $25K?

I personally have a Chase Freedom Points credit card that gives 1% on regular purchases and 3% on purchases at gas stations, groceries, and pharmacies with a $27K line. Initially the credit line was much lower however, I had another Chase Platinum card with $12K line. After applying for a Chase Freedom I got a line of $13K then called in immediately after approval to consolidate the credit lines to boost it to $25K. I then performed a balance transfer on nearly the total amount and a few months later got an increase to $27K.

Consolidate Lines: Essentially the best way to get lines about $25K is to apply for multiple cards from the same issuer and consolidate the lines. This works out really well for taking advantage of balance transfer offers as well. You can apply for the card with the best balance transfer terms last then consolidate all the lines from previous cards.

Balance Transfer at Acquisition Point: Another way to ensure you get approved for a higher line is to request large balance transfers at the time of acquisition. This way the issuer know that no matter what that amount will be utilized on your account and have less risk of approving you. Try applying for 2 cards at once with balance transfer requests of up to $20K (depending on your credit history) and you should get approved with good credit. Then you can consolidate the lines and debt since you can take advantage of the low introductory balance transfer offers over a period of time.

Share This


Tags: , , , ,