I recently discussed that we have $223,270 outstanding in credit card balances. The next logical question is how much in credit limits do we have to support this strategy? Over $1 million! $1,020,270 to be exact. The total includes credit cards and lines of credit.
I thought it would be a fun challenge to see if we could come close to $1 million for the third millionaire post. The series looks at the millionaire perspective from various angles. Read the first two: Millionaires in the Making: Pros and Cons and Do Negative Millionaires Exist? I actually didn’t even know the total until I added it up for this article. That could be one gigantic shopping spree if we were ever inclined to try to use it all in one day!
Here are some statistics about the accounts and limits.
Number of accounts: 89
Number of companies: 17 plus 5 retail
Largest credit card line: $73,000
Smallest credit card line: $500
Average credit card line: $11,464
Companies with total limits over $50,000: American Express, Chase, Pentagon Federal Credit Union, Local Credit Union, Citi, Bank of America and Discover.
Most accounts at one company: 19 (Chase), 13 (Citi), 11 (Bank of America)
Breakdown by ownership:
Mrs. Dupaix: $415,750
Mr. Dupaix: $370,800
Authorized User: $62,370
The limits include two Helocs and four family credit cards which we are authorized users on.
Cards We Have
Here are some of the cards we currently use: Current Quarter Rotating Cash Rewards Credit Cards.
Why So Much?
I like to take advantage of 0% introductory rates to make money. I also like to keep lots of available limits on hand to shift them around when one is due. See When Does the 0% Credit Card Really Expire? to read about the difficulty in pinpointing that day. In addition, having lots of cards means lot of offers in the mail to make even more money.
I didn’t actually intend to accumulate this many cards or these limits, it was just a process over the last eight years or so. I rarely close accounts and try to use each card once a year to keep the company from closing the account.
Credit Score Impact
I’m pretty sure this blows the theory that too many cards or limits too high will wreck your credit rating. All of our scores using various models are fine, and we have not had any problems qualifying for the best mortgage and loan rates. I used to monitor our credit daily, but outgrew my interest in tracking it.
Technically since four cards are authorized users, we need another $42,100 to bump us over the $1 million mark in our own limits. It’s a ridiculous challenge, but one that excites me none the less. I’ll be on the lookout for a new card to apply for! I’ll let you know when I find the right one.
I would be interested to read a post about the process you use to keep track of all those accounts, as well as other accounts you mights have. It is challenging for me to keep track of 5 accounts, much less 89. I feel like you must have a more efficient process than I. Where do you keep the 70+ credit cards that don’t fit in a wallet?
I have the same question as the first reader. I would really like to know how you track so many cards?
@ Garrett & B: I’m a big fan of Microsoft Money! I store all the details about the credit cards there, such as credit limits and account numbers. The only exception is 0% money, which I keep on an excel spreadsheet with the “english version” of the end date of the offer.
Great idea, I’ll put together another post in the future about tracking stuff, because I have many more accounts than just the credit cards. (Numerous banking and investment accounts and managing accounts for five other family members). We only use and carry our favorite two credit cards. The rest are stored in a safe.
I must say that at first glance that seems to be a lot of credit limit but then I understand what you have been doing and I must commend you. As long as it works for you, that is all that matters.
@Adeem: Thanks! It is a lot, but worth it as long as I don’t miss any deadlines!
Doesn’t the 15 day notice rule scare you? I mean, the credit card companies can do anything they want, with just 15 days notice. How does that risk fit into your strategy?
@Lost Cause: I’m not too worried. If they change terms and I don’t like the new ones, I can close the card and move on. I have plenty to choose from and there will always be other cards. Although I’ve never had to do that.
How do you manage the transfer fees – with Chase particularly it use to be 3% or $99 but they are changing the rule to be 3% with no cap. So if you transfer in 10k you are paying $300 in fees.
@Tom: I have found the move toward eliminating the maximums seems to be for current cardholders. There are still many companies out there that offer a maximum if you apply for a new card. I don’t do the transfer unless there is zero fee or it is capped at $75 or less. I prefer Citi and American Express as they often have no fees. When there is a fee I transfer larger amounts to make it worthwhile.
>we need another $42,100 to bump
>us over the $1 million mark in
>our own limits
I guess we all need a goal in life! 🙂
@ Dividends 4 Life: When you put it that way, it sounds like a really funny goal!
If you are transferring money around, then you must carry balances on these cards, I’m assuming. I don’t think it’s ever a good idea to use other people’s money, but to each her own.
@ green 3: Yes, I am carrying balances but only at 0% for credit card arbitrage. I’m leveraging the money similar to any other loan.
Sorry if I missed something, but how do you keep the accounts open? Don’t you need to close them so you can reapply and get the 0% offer again? Thanks.
@ Dave: When I apply for new cards, I apply for a different branded card. For example I had a 0% on an old American Express Blue Cash card. When it expired, I applied for a new American Express In Chicago card.
I have to admit just reading this makes my head swim. I don’t know if it’s old age or what, but I’m having a hard time keeping track of our dozen or so accounts, let alone nearly 90. LOL. I use Quicken. I actually do have about 25 credit cards, but I only use one for actual credit.
@ Mrs. A: And like you, I don’t actually use all the cards at the same time…. so that does help somewhat with keeping track of them. Although I would say that most people would probably consider 25 to be a lot too!
1 million dollar credit limit can really go over your head. My husband and I tried only have 2 credit card with smallest interest rate to keep us debt free. We do go negative once in a while but we tried to keep the balance as close to zero as possible.
I too would like to know how you were able to keep track of 89 credit accounts. Do you mind to share some tips and secrets?
Here’s a follow up article where I detail how I track the 89 credit accounts (and 92 others)…
Do you have a cash available to pay off the debt? What if your husband stop working. How do plan to pay it off?
@ Moneymonk: Yes, absolutely. The credit card money is used for arbitrage and is not actual debt. The money is available to pay it off if needed.
I also used the 0% balance transfer offers to my advantage. I did the same, get the money from a 0% check offer, deposit it in high yield account and set up auto pay to pay monthly minimums and then full amount at end of offer if another offer was not available to roll over. My friends thought it was a good idea, but no one really had the time or discipline to do it. The term credit card arbitrage sounds cool.
I dont get it? why do you owe so much money? i have a bunch of credit lines too, but i dont have any balances on any of them. If you made enough to retire, why do you have such a high balance? My follow up question is i do have a large amount of school loans, do you think it would be good to pay off all the school loans and start rotating them on 0% credit cards?
Absolutely not. From my understanding, Madison is borrowing money from the credit card company at 0% and putting the money into a high yield account (not spending it). If needed the money in the high yield account can be used to pay off the credit card. Paying off the student loans with credit cards would put you in the same situation as Madison but without having the money available to pay it off.
Since you have 90 credit cards so far, won’t someday you will find that there will not be anymore new 0% cards to discover? Do you plan to stop the credit card arbritage game once it gets harder to find new cards?
In response to suiling, remember that credit cards are issued by banks, regardless of what brand name they carry. You could easily have 100 different visa cards from 100 different banks. The only end to fresh, new 0% cards is if there is not a single bank in the country willing to extend the offer, and that’s not likely to happen as banks need to acquire new debt to produce revenue (from your eventual interest). The way to win is to rollover your debt to another card before interest is due.
So my questionis what is the point of having such a high credit limit? Do you use this for some other reason?