Quite a few questions I get revolve around our credit. To take advantage of bonus offers we routinely apply for multiple new cards. Our latest round was a $4,420 Credit Card Application Spree.
Readers wanted to know How Much Do Credit Inquiries Really Matter? and what kind of credit limits do we have to support this strategy?
How much do we have in total credit limits? Over $1 million! $1,008,070 to be exact. The total includes our credit cards and lines of credit.
Here are some statistics about our credit accounts and limits:
- Number of accounts: 65
- Number of companies: 15
- Largest credit card line: $50,000 (Capital One Venture Card)
- Smallest credit card line: $500
- Average credit card line: $15,500
Here is how it breaks down by issuer:
- Companies with largest limits: Capital One, American Express, Pentagon Federal Credit Union, and Barclaycard.
- Most accounts at one company: 12 (Citi), 9 (Amex), 8 (Chase), 7 (Bank of America)
And how it breaks down by ownership:
- Me: $644,000
- My husband: $364,000
Usually I try not to have joint credit with my husband. Avoiding joint cards allows you to Double Your Sign Up Bonuses. The reason I have so much more than my husband has nothing to do with our credit… it’s because it’s much easier for me to apply for cards and call to discuss details on reallocations, reconsiderations, and retention offers!
How Has it Changed Over Time?
Credit Limits Have Gone Up. Since I last took a snapshot of our credit in 2007, our total credit lines have actually gone up about $200,000. In addition, our average credit line has also gone up. In the snapshot I’ve removed family members’ cards that we are authorized users on, retail store cards, and one of our larger lines of credit. Since these cards have limited use, I don’t care to track them. In addition, we have added some cards that don’t have any preset spending limits, but those are hard to quantify and add to the statistics.
Number of Accounts Has Gone Down. The number of accounts we have has gone down by roughly 13. This is mostly due to consolidating old cards and closing some accounts that were never used. In addition, since many of the new cards I pick up in application sprees have the annual fee waived for the first year, I often close those accounts after getting the bonus. Finally, I do close some cards I like to try to churn them for another bonus when it’s allowed.
Why So Much?
What is the purpose of maintaining such a ridiculous amount of credit? There are actually a few good reasons. Almost every reason revolves around my desire to make more money!
Keep utilization low. I carry about $255,000 in balances at 0% rates (the balances aren’t from an undisclosed spending problem, it’s a form of arbitrage to leverage other investments at a lower interest rate; the balances could be paid off at any point in time if needed). With credit limits over a million, this keeps my usage about 25%. Keeping my utilization “low” enables me to apply for new cards without any adverse impacts on our credit score.
Multiply bonuses. I like to have multiple cards to take advantage of promotions and bonuses like the Quarterly 5% Cash Rewards Cards and Maximizing the Discover Apple Pay $2,000 Promotion. In addition, each card I carry has different perks and rewards.
Purchasing. We purchase a lot of inventory to sell on Amazon. It’s all purchased at one time for the holidays, so it’s nice to be able to spread it out across various cards and not run into any spending limits.
Get new offers. In addition, having lots of cards means lot of offers in the mail to make even more money!
Questions About Our Credit
How do I track it? I use Quicken to track all of my accounts. It’s one of the Personal Finance Tools I Use Everyday.
What is the credit score impact? The theories that “too many cards” or “too much credit” will negatively impact your credit score hasn’t been the case. We’ve been accumulating cards via application sprees for well over a decade. During that time we’ve maintained similar or increasing limits and we have not had any problems qualifying for new cards or the best loan rates. I’ve had some interesting discussions with loan officers, but usually after a short discussion they find it intriguing (or they just think I’m crazy)!
As always, my use of credit cards is extreme. It takes planning, disciple, and organization. It’s not for everyone. As we pick up new readers I like to throw out that reminder from time to time!