For some background, I'm a recent graduate doing mostly freelance work while teaching English on the side in France. My freelance work grosses me about $25,000/year, and my job in France is about $8,000/year (very part-time).

In total, I have the following credit available to me:

  • $300 credit card with my bank
  • $2,000 credit card with my bank
  • $2,000 credit card with Amazon/Chase bank (special promotion)
  • $3,000 credit card with Apple/Barclay bank (special promotion, used to buy work computer)
  • $7,900 PLOC with my bank

Total: $15,200

In essence, my credit available is almost 50% of my gross annual income. I don't even come close to using even 10% of the credit at a given time, and always pay my balance off in full at least a week before the actual due date. In fact, I usually pay off the balance in full very soon after purchases are made in order to carry a $0 balance at all times. Needless to say, I'm responsible with my money and don't spend what I don't have.

But I fear that in the future, if I go to apply for loans for a car or house or whatever it may be, that lenders may see my available credit as a risk.

Do I have too much credit?


Do I have too much credit?

No. Lenders determine your ability to pay based on the balances you owe, the income you earn, and your history of using credit (on-time payments, age of accounts, utilization), not on how much available credit you have. Too little available credit makes it harder to keep utilization low.

If you recently opened a large number of accounts drastically increasing your available credit, a lender would view that as a risk, so it's generally advised not to open new lines of credit shortly before applying for car/home loans.

Otherwise, old accounts with low-utilization do not hurt you. Incidentally 0% utilization does not help you as much as 1-10% utilization, but it's not worth fussing over in my opinion.

For people that aren't as responsible/disciplined, more available credit can lead to increase spending that they cannot afford, so it can be problematic.

  • With your last paragraph, are you suggesting that while lenders don't ding people for having very high limits, perhaps they should? – nanoman Feb 25 '19 at 1:56
  • @nanoman Historically lenders did consider more available credit to be risky, but I believe that was pre-FICO and in the FICO era they realized that available credit alone isn't a worthwhile risk-factor. – Hart CO Feb 25 '19 at 3:29
  • While I don't know the local customs in France in terms of car or house credit, I can say that the local house credit customs in Germany are very different from what you say which seems to relate mostly to the US/North America. – cbeleites unhappy with SX Feb 25 '19 at 21:05
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    @cbeleites Good call, I had it in mind that living in France was a temporary thing, but re-reading the question there is no reason for that assumption other than all the $ for currencies. – Hart CO Feb 25 '19 at 21:28
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    @cbeleites I’m living in France temporarily, and moving back to the US in May. As much as I’d like to live in France permanently, getting a visa is pretty difficult! So this question is specifically in relation to US credit/lending. I won’t be buying a house any time soon in France. – Chris Cirefice Feb 26 '19 at 8:14

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