Key takeaways
- So long as you don’t use your accessible credit score to run up excessive balances, numerous accessible credit score gained’t damage your credit score rating.
- Obtainable credit score may even enhance your credit score utilization, which accounts for 30 p.c of your credit score rating.
- Some issuers could cap the quantity of credit score they’ll lengthen a cardholder throughout a number of playing cards, that means you could possibly run into an impediment getting one other card from the identical issuer if you have already got numerous accessible credit score with them. There are answers you possibly can discover if this occurs to you.
Having a bunch of obtainable credit score you haven’t any intention of utilizing might work towards you if you happen to apply for one more bank card, however that’s actually the one unfavorable consequence to fret about. So long as you aren’t tempted to max out your accessible credit score limits, additional accessible credit score is nothing to fret about.
In reality, having extra credit score than you want may even allow you to with regards to one of the crucial necessary classes contributing to your credit score rating: Your credit score utilization. This issue makes up 30 p.c of your FICO credit score rating, which suggests the extra accessible credit score you have got, the better it’s to attain extremely on this class.
Is it dangerous to have a excessive credit score restrict?
It undoubtedly isn’t “dangerous” to have a excessive credit score restrict. Truly, this exhibits that you simply’ve been rewarded for having a excessive revenue, sustaining a superb credit score rating or each. Typically talking, a excessive credit score restrict tells future collectors that you would be able to deal with borrowing cash and paying it again on time.
A excessive credit score restrict doesn’t imply you need to use it, and also you aren’t penalized in case your spending by no means will get near your restrict. A excessive credit score restrict offers you numerous room to spend and preserve a low credit score utilization ratio.
Most specialists agree conserving your credit score utilization beneath 30 p.c of your accessible credit score limits is a good suggestion, and conserving credit score utilization beneath 10 p.c may also help your credit score rating essentially the most. This implies conserving your bank card balances beneath $3,000 for each $10,000 in accessible credit score you have got at a most, or beneath $1,000 for each $10,000 in accessible credit score for the very best outcomes.
In case you have a credit score restrict of $20,000 on a single bank card, this implies you could possibly owe $2,000 on that card and nonetheless rating exceptionally effectively to your credit score utilization ratio. In the end, excessive credit score limits provide you with extra wiggle room to hold a steadiness with out showing credit score hungry to the credit score bureaus or hurting your credit score rating.
What’s your credit score utilization?
You should utilize Bankrate’s credit score utilization calculator to see your complete credit score used expressed as a proportion.
Are you able to get denied for having an excessive amount of accessible credit score?
Sure, it’s potential to be denied a brand new bank card primarily based on having an excessive amount of accessible credit score. Card issuers could resolve you have got the revenue and credit score to assist a certain amount of obtainable credit score total, which suggests a denial might happen if you happen to’ve already achieved that restrict throughout different playing cards with the issuer.
Should you’re making use of for one more card with an issuer that has already given you a beneficiant quantity in accessible credit score, there’s a possible workaround you possibly can attempt. Should you don’t get an on the spot approval while you apply for a brand new card with that issuer, name the issuer’s bank card reconsideration line to see in the event that they’ll allow you to transfer some accessible credit score from an current card to the brand new account.
In case you have a $30,000 credit score restrict on one card in good standing, for instance, they could allow you to decrease that restrict to $20,000 and transfer $10,000 of your credit score restrict over to the brand new card you’re making use of for. On the very least, it is best to name and ask about this risk you probably have different accounts in good standing with the issuer. They could say “no” to your request, however you’ll by no means know until you ask.
What’s the ultimate quantity of obtainable credit score?
The best quantity of obtainable credit score is any quantity over 90 p.c of your credit score limits. For finest outcomes, it is best to try to take care of $9,000 in accessible credit score or extra for each $10,000 in credit score limits you have got.
You may additionally wish to be sure to have sufficient accessible credit score to get you thru an emergency, significantly if you happen to’re constructing or rebuilding an emergency fund. For instance, it is smart to have sufficient accessible credit score to cowl a shock automobile restore so you may get your automobile again on the street to go to work, or sufficient accessible credit score to cowl a number of months of dwelling bills if you happen to face a lack of revenue or lose your job.
Most specialists counsel three to 6 months of emergency bills saved in financial savings, simply in case. The finest high-yield financial savings accounts supply excessive APYs that may allow you to construct an emergency fund as shortly as potential.
As of June 2024, 29 p.c of individuals stated that they had some financial savings however not sufficient to cowl three months’ bills, in response to Bankrate’s Emergency Financial savings report. A bank card with loads of accessible credit score can function a backup in a real emergency. Playing cards can be a handy strategy to pay for emergency bills upfront earlier than reimbursing your self out of your emergency fund. It’s even higher if you happen to pays with a money again or journey rewards card so you possibly can rack up rewards for that emergency cost you’re in a position to repay instantly.
Common credit score restrict statistics
The common credit score restrict for People diverse dramatically by age and era in 2024, in response to data from credit score reporting company Experian. Common credit score limits additionally elevated throughout the board for each era from 2023 to 2024, with child boomers having the best common credit score limits total.
| Generations | Common credit score limits 2023 | Common credit score limits 2024 |
| Supply: Experian State of Credit score Playing cards | ||
| Era Z (ages 18 to 27) | $12,899 | $14,195 |
| Millennials (ages 28 to 42) | $27,533 | $29,665 |
| Era X (ages 44 to 59) | $38,665 | $40,551 |
| Child boomers (ages 60 to 78) | $41,906 | $42,824 |
| Silent era (ages 79+) | $32,812 | $32,889 |
Common steadiness statistics
Experian information additional revealed that the common bank card steadiness throughout People of all age teams got here in at $6,730 as of Q3 of 2024. This common is 3.5 p.c increased than the common bank card steadiness the 12 months earlier than.
Common bank card balances additionally diverse by era in 2024, however elevated for all generations in comparison with the earlier 12 months.
| Generations | Common bank card steadiness 2023 | Common bank card steadiness 2024 |
| Supply: Experian State of Credit score Playing cards | ||
| Era Z (ages 18 to 27) | $3,262 | $3,456 |
| Millennials (ages 28 to 43) | $6,521 | $6,932 |
| Era X (ages 44 to 59) | $9,123 | $9,557 |
| Child boomers (ages 60 to 78) | $6,642 | $6,754 |
| Silent era (ages 79+) | $3,412 | $3,428 |
Common credit score utilization
Common credit score utilization diverse by era as effectively, and the outcomes are usually not that shocking. Information from Experian exhibits that older customers have a tendency to make use of much less of their accessible credit score total, whereas youthful bank card customers have a tendency to hold increased bank card balances.
The next chart lays out the common credit score utilization by era for Q3 of 2024, per credit score reporting company Experian.
| Generations | Common credit score utilization | Common credit score rating |
| Supply: Experian State of Credit score Playing cards | ||
| Era Z (18 – 27) | 37% | 681 |
| Millennials (28 – 43) | 36% | 691 |
| Era X (44 – 59) | 34% | 709 |
| Child boomers (60 – 78) | 21% | 746 |
| Silent era (79+) | 12% | 760 |
Common credit score utilization additionally diverse dramatically inside every tier of credit score scores in 2024. Information from Experian exhibits that common credit score utilization is way increased for these with poor credit score, whereas customers with higher credit score have a tendency to make use of much less of their accessible credit score total.
The next chart lays out the common credit score utilization by credit score rating vary within the third quarter of 2024, per credit score reporting company Experian.
| FICO rating vary | Common credit score utilization 2024 |
| Supply: Experian State of Credit score Playing cards | |
| 300-579 (Poor) | 80.7% |
| 580-669 (Truthful) | 61.4% |
| 670-739 (Good) | 38.6% |
| 740-799 (Excellent) | 15.2% |
| 800-850 (Distinctive) | 7.1% |
The underside line
Having an excessive amount of accessible credit score isn’t one thing to fret about, but there are different credit score components that ought to have your consideration. For the very best likelihood on the highest potential credit score rating, ensure to prioritize paying your payments early or on time whereas striving to maintain your credit score utilization as little as potential. The second a part of the equation really turns into simpler when you have got excessive credit score limits, so no have to let the problem of loads of accessible credit score hold you up at evening.
