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Say a friend of mine owns 10 credit cards with a total credit limit of $100,000 with total CC debt of $10,000. Does the total credit limit affect how much new credit will be approved? Does CC debt play a role? Does the income you report when applying play a role?

My thought was... if a person asks for their overall credit limit to be reduced, would that allow them to apply for more cards without being rejected.

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  • If you have ten credit cards and a total limit of $100K, why do you (sorry, I meant your hypothetical friend) want yet another credit card? Sep 5, 2014 at 19:33
  • sign up bonuses such as free hotel stays, cash, etc. My friend signed up for a chase sapphire preferred card, spent the minimum and got 50,000 points (50k miles or $500 cash equivalent).
    – Sun
    Sep 5, 2014 at 20:27
  • If all you want is sign-up bonuses, the answer's easy. Kill an existing card before requesting another one.
    – keshlam
    Sep 5, 2014 at 21:24

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Yes. Your available credit line is definitely an indicator used to determine how credit "worthy" you are.

Put simply, if someone has the ability to add $90,000 more debt (100k limit - 10k used) to their personal balance sheet, that would make me more hesitant to loan that person an additional $50,000 for some other reason.

Here are 3 ways that the credit limit are used to influence your credit score:

  1. Installment balances compared to the original loan amounts.
  2. Revolving account balance compared to an individual's revolving credit limit on an account-by-account basis; and
  3. Total revolving account balances compared to an individual's total revolving limits.

Source (Emphasis mine): http://www.creditunions.com/articles/five-fico-score-factors-your-members-need-to-know/

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  • If the credit limit was reduced to $50k and debt reduced to $5k, (50k limit - 5k used), would that increase a person's chance to successfully apply for more credit cards?
    – Sun
    Sep 5, 2014 at 18:18
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    Certainly I'd consider that person a better risk for new credit than the one who's at $10K of $100K. I'd be far more inclined if their current limit was $20K and their outstanding balance was $100 but had gone up to $10K briefly at some point in the past; that both illustrates responsible use of credit and keeps the worst case within a range that I believe they might actually be able to handle without going broke. Of course if your net worth is $100M, that last concern doesn't apply.
    – keshlam
    Sep 6, 2014 at 4:56

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