Apple Card Apple Card limit increase.

[Phil77354]

. . . having a lot of unused credit can be seen as a warning sign to lenders. . .

Well, my own financial education is a bit more than 'google-born' and I don't particularly agree with your statement.

Years ago, lenders would have more discretion in making loan decisions. These days it is clear that credit score is the largest factor, plus of course income and ability to repay based upon other debts and obligations. Discretion has largely evaporated, unless perhaps you are in a high income category and able to access personal banking services that most people cannot qualify for.

Credit score information I refer to from time to time, on my bank site and so forth, always reports credit usage (as a percentage of total available credit) and states that lower is better. Most people who have some number of credit cards will see their total available credit increase from year to year. Your comment suggests that this could be a bad thing. I don't think that is generally true.

I also think that credit card issuers will move fairly quickly to reduce credit limits on cards, if a card holder starts to accumulate balances on their cards and begin to use a larger percentage of their available credit. They will also sometimes lower limits if card utilization is low. These are my own observations after many years of personal experience.

 

[BF1M]

Not really sure where something like that can come up as an actual issue unless there's perhaps something else is in play.

If for no other reason then it represents debt that could be prioritized over what they are offering you if, for some reason, your spending were to increase or your income were to decrease.

 

[BF1M]

I also think that credit card issuers will move fairly quickly to reduce credit limits on cards, if a card holder starts to accumulate balances on their cards and begin to use a larger percentage of their available credit. They will also sometimes lower limits if card utilization is low. These are my own observations after many years of personal experience.

I’ve never, not one single time, had a credit limit decrease. Either from not being used or being used too much.

Not saying it’s not a practice; just that it’s never happened to us. And there were a few years in grad school where credit=Eating haha

 

[C DM]

If for no other reason then it represents debt that could be prioritized over what they are offering you if, for some reason, your spending were to increase or your income were to decrease.

I could potentially see the theoretical potential of something like that playing some type of a role, but can't say that I've heard of something of that sort having an impact. That said, it's hard to say that it can't happen in some type of situations, for one reason or another, especially if there might be some other things in play.

At the same time, with credit utilization generally being something more prominent and playing a larger role in credit scores and other considerations, it seems that for most that would have a bigger impact than something that can at best only potentially come into play, to some degree, in certain stations.

 

[BF1M]

I could potentially see the theoretical potential of something like that playing some type of a role, but can't say that I've heard of something like that having an impact. That said, it's hard to say that it can't happen in some type of situations, for one reason or another, especially if there might be some other things in play.

Discretion still plays a massive role in lending and commerce unfortunately.

 

[Rorosbutt]

This represents some level of false understanding of what an increased credit limit means. There is no down side to having an increased limit, in fact the opposite is true. Credit scores are used on utilization, a larger limit means a decreased utilization no matter how much you spend.

If you pay your credit card off monthly (as you should!) then there's no up or down side to an increase.

If you do not pay your credit card off monthly, then it gives you more leeway in spending for the following month as you continue to pay down your credit card.

However, as NerdWallet points out the down side that is possible is if your budgeting is iffy, and you tend to overspend and use your limit as a maximum spending line. If that's the case, however, I would recommend focusing more on learning to budget.

I would just add that an automatic credit limit increase doesn't result in a hard pull on your credit score either.

thank for these great points!

 

[Eric Idle]

I’ve had my Apple Card since it launched in September of 2019. I requested a credit limit increase in August of ‘20 and it was approved. Now, today I received another increase without even asking. I’m curious if others have had a similar experience? From what I’ve googled, it doesn’t seem like Goldman Sachs does automatic increases and I wonder if that has changed? Thanks.

Yep, I got it too. 10,000 was added to my credit limit.

 

[Eric Idle]

That’s subjective. They aren’t always good.

Only if you are poor with money are increases bad.

 

[Eric Idle]

It isn’t a “false understanding”; it’s common courtesy.

Not really interested in joining you on your high horse of google-born financial education but I will say this. As any adult who has sought to be lent a significant amount of money(think house)can tell you, having a lot of unused credit can be seen as a warning sign to lenders.

Not to mention the opportunistic side of credit cards increasing our limits around holidays. Sure nobody is forcing you to spend but it’s just sleazy.

You are 100% incorrect. Having available, unused credit, is a bonus to your score. It HELPS you. That's why closing unused credit cards HURTS your score.

 

[SpaceGrayAlways]

It isn’t a “false understanding”; it’s common courtesy.

Not really interested in joining you on your high horse of google-born financial education but I will say this. As any adult who has sought to be lent a significant amount of money(think house)can tell you, having a lot of unused credit can be seen as a warning sign to lenders.

Not to mention the opportunistic side of credit cards increasing our limits around holidays. Sure nobody is forcing you to spend but it’s just sleazy.

As others have stated, there's some incorrect information in your assumptions here.

Having unused credit is not seen as a warning sign to lenders. The opposite is in fact true as stated by Experian:

"Increased credit utilization: Your credit utilization rate is the amount of revolving debt you currently have compared to your total credit limit. The lower the rate, the better. That shows lenders you're not maxing out your cards, and you can be trusted to use credit responsibly if they extend it to you." Source

As I stated earlier, having a lower utilization is always better for your credit score. Therefore, unless your personal habits are to overspend a credit card, then this will immediately help anyone keep their utilization lower (ideally you want utilization to be 30% throughout all your accounts and 30% on each account. Source)

In terms of the argument that "they should have asked,” I guess I can see the argument that it is a courtesy to ask to do something before having it done to you... But the last time someone gave me more flexibility in any aspect of my life, I didn't give it back and say "ask first next time".

 

[Eric Idle]

I fully expect my credit score to go up substantially next time I check with this 10,000 increase to my limit. I never carry a balance so my percent unused credit will get much lower.

 

[BF1M]

You are 100% incorrect. Having available, unused credit, is a bonus to your score. It HELPS you. That's why closing unused credit cards HURTS your score.

No, that is not why closing unused credit cards hurts your score....refer yourself back to utilization and age of accounts.

You’ll get there.

 

[BF1M]

Only if you are poor with money are increases bad.

I never said they were “bad”; I said they could have negative consequences and it would simply be nice to be asked.

 

[BF1M]

As others have stated, there's some incorrect information in your assumptions here.

Having unused credit is not seen as a warning sign to lenders. The opposite is in fact true as stated by Experian:

"Increased credit utilization: Your credit utilization rate is the amount of revolving debt you currently have compared to your total credit limit. The lower the rate, the better. That shows lenders you're not maxing out your cards, and you can be trusted to use credit responsibly if they extend it to you." Source

As I stated earlier, having a lower utilization is always better for your credit score. Therefore, unless your personal habits are to overspend a credit card, then this will immediately help anyone keep their utilization lower (ideally you want utilization to be 30% throughout all your accounts and 30% on each account. Source)

In terms of the argument that "they should have asked,” I guess I can see the argument that it is a courtesy to ask to do something before having it done to you... But the last time someone gave me more flexibility in any aspect of my life, I didn't give it back and say "ask first next time".

You are complelty ignoring, to bolster your own comments(which I never said were incorrect), what I have said. Yes, lower utilization can help your score. That’s true; just as a lot of unused credit can be a warning sign to potential lenders. Among other reasons an automatic credit increase isn’t always 100% good.

As far as asking, maybe you should...

 

[Eric Idle]

I never said they were “bad”; I said they could have negative consequences and it would simply be nice to be asked.

Poor, bad, no difference. What I said above still applies.

 

[BF1M]

Poor, bad, no difference. What I said above still applies.

You aren’t listening....

 

[SpaceGrayAlways]

No, that is not why closing unused credit cards hurts your score....refer yourself back to utilization and age of accounts.

Closing accounts hurts your score for two reasons:

1. Length of accounts that are held
2. Credit utilization

So yes, you are correct that it is not ONLY because of utilization, but @Eric Idle Is correct that utilization can increase when closing a credit card and as a result negatively impact your score. Source

That’s true; just as a lot of unused credit can be a warning sign to potential lenders.

Could you show me a source for this @BF1M? Because there's a decent number of rich people out there who have insane credit limits (like... $500,000 and plenty with limits in the $1,000-$50,000 range which is what is being discussed as potential increases here). I haven't found any evidence that people in any of those categories find themselves in a pickle solely from having unused credit utilization. However, if you say... Have unused utilization on one card, but overspend repeatedly on another, then absolutely that could impact your credit.

Among other reasons an automatic credit increase isn’t always 100% good.

Again, would love to see what source you are pulling from here.

I'd be happy to change my opinion on this topic, and do so publicly, if you can show some evidence... But other than your point about asking first... I don't see much to back it up.

 

[Böhme417]

I fully expect my credit score to go up substantially next time I check with this 10,000 increase to my limit. I never carry a balance so my percent unused credit will get much lower.

Good luck. From what I hear, GS doesn't report very often. I have a friend with an Apple Card, and the last time his balance and CL was reported was July.

 

[Eric Idle]

You aren’t listening....

You aren't comprehending....

 

[BF1M]

You aren't comprehending....

What about this aren’t you getting? The original premise was that automatic(ie unasked for) credit increases are only a good thing. I’ve given tangible reasons why that isn’t always so. Just a few reasons actually; I can think of others.

 

[BF1M]

Closing accounts hurts your score for two reasons:

1. Length of accounts that are held
2. Credit utilization

So yes, you are correct that it is not ONLY because of utilization, but @Eric Idle Is correct that utilization can increase when closing a credit card and as a result negatively impact your score. Source


Could you show me a source for this @BF1M? Because there's a decent number of rich people out there who have insane credit limits (like... $500,000 and plenty with limits in the $1,000-$50,000 range which is what is being discussed as potential increases here). I haven't found any evidence that people in any of those categories find themselves in a pickle solely from having unused credit utilization. However, if you say... Have unused utilization on one card, but overspend repeatedly on another, then absolutely that could impact your credit.



Again, would love to see what source you are pulling from here.

I'd be happy to change my opinion on this topic, and do so publicly, if you can show some evidence... But other than your point about asking first... I don't see much to back it up.

You are, again, ignoring what I said. I never said it didn’t have positive impact on your score, I said it wasn’t always a good thing for the individual.

Furthermore, I stand by my statement that a lot of unused credit can be seen as a warning sign to lenders. My source? Life.

You keep arguing points that I’m not even impeaching. None of which has anything to do with my original point; that being asked would be preferable for tangible reasons.

I’m not sure how I can make it any more clear. I feel like I’m having a discussion with someone on the spectrum....

 

[Böhme417]

You are, again, ignoring what I said. I never said it didn’t have positive impact on your score, I said it wasn’t always a good thing for the individual.

Furthermore, I stand by my statement that a lot of unused credit can be seen as a warning sign to lenders. My source? Life.

You keep arguing points that I’m not even impeaching. None of which has anything to do with my original point; that being asked would be preferable for tangible reasons.

I’m not sure how I can make it any more clear. I feel like I’m having a discussion with someone on the spectrum....

I'll add my pair of pennies. It's always a good thing.

A lot of unused credit is not a warning sign to lenders. It means you don't need it. Granted, I probably don't have as many years of life experience under my belt as you, but I have never found this to be the case, nor do I know anyone who would say it is.

Further, in my experience, no creditor ever asks if you want more. They just give it to you. That's the common practice. Want notice for your records? Sure. Want notice/permission because you spend to your limit and need to know when you'll be told no? You shouldn't be using a credit card.

 

[BF1M]

I'll add my pair of pennies. It's always a good thing.

A lot of unused credit is not a warning sign to lenders. It means you don't need it. Granted, I probably don't have as many years of life experience under my belt as you, but I have never found this to be the case, nor do I know anyone who would say it is.

Further, in my experience, no creditor ever asks if you want more. They just give it to you. That's the common practice. Want notice for your records? Sure. Want notice/permission because you spend to your limit and need to know when you'll be told no? You shouldn't be using a credit card.

You, like the others, are completely disregarding what I said about why it’s not always good for the individual.

I didn’t stay a lot of unused credit is a steadfast warning sign I simply said it can be. Discretion is still a part of lending. Source? Read that crap that comes with your shiny new card. They can cancel it at any time for no reason; regardless of your balance and score. Lenders are allowed and do use discretion. Seeking credit, especially in credit cards, when a lot(of usable)is available to the borrower already can and does look fishy to the right lender. Others won’t give a crap.

That’s just one reason an automatic credit increase isn’t “always good”


Also, make no mistake, anytime you log into a credit card website and it asks you to update your income, that’s them asking if you want more credit in essence.

Some fatherly advise on when and when not to use a credit card and who should and shouldn’t is irrelevant and reeks of someone who learned those lessons the hard way. I sure didn’t. At no point did I ever say nor hint that I don’t like automatic credit increase due to a lack of self control. A few people on a high horse with access to google put those words in my mouth. I guarantee you my 20,000 limit I was given isn’t a fluke.

Oh and I’ll be the bigger person and not point out how you made my point for me. I’ll let you come to that realization hahaha

 

[Eric Idle]

What about this aren’t you getting? The original premise was that automatic(ie unasked for) credit increases are only a good thing. I’ve given tangible reasons why that isn’t always so. Just a few reasons actually; I can think of others.

None of your reasons have any merit. The ONLY reason getting more credit is bad is if you abuse it. There are no other bad reasons.

 

[sevoneone]

I got an 80% increase. Nice little surprise. My wife was laid off due to the pandemic in the spring. We we’re lucky to avoid any major issues, but we did unfortunately end up carrying a couple of big charges and took a hit on a late payment on another card that, together, dropped my score 123 points (first missed payment ever ). Fortunately we’re nearly caught up on balances and my score has already rebounded over 100 points. I guess it was enough for G Sachs to extend the increase. I’m so grateful as it will only help speed up the rebound.

Seeking credit, especially in credit cards, when a lot(of usable)is available to the borrower already can and does look fishy to the right lender. Others won’t give a crap.

You are correct. Seeking NEW sources of credit when it is unclear why you need it might throw some flags, particularly on revolving accounts like credit cards. Seeking multiple sources of NEW credit within a short period of time will almost always be a red flag and there is a reason the hard inquiries creditors pull have a negative impact on your score and usually stick around for a year or two.

The key words here are SEEKING and NEW. Your bank giving you an increase on an existing account based on a soft pull is not considered a new source of credit. There is no situation where an automatic credit increase like this should harm you.

If you are actively seeking new credit or asking for increases that require a hard pull of your credit, that is where you are going to run into trouble.

If you open 3 new credit cards, take a new personal loan and finance a car all within a year then try to buy a house, yes there will be concerns that you are able to afford all the payments.

Even if that is not the case, loan underwriters, particularly for home mortgages, are paid to be thorough and ask questions that can seem uncomfortable, but it doesn’t mean what they are asking about is necessarily a bad thing. People get asked to write letters/statements about the purpose of certain accounts or clarifying sources of income all the time.