People often ask me how I ended up with such high credit limits.
Quite simply, it's just a matter of new creditors matching my established credit limits. Think about it: if I had four credit cards, and each of the limits were $500 each, what are the chances that a new creditor would issue me a $10,000 limit? Not very good. But what if my limits were $10,000 each? My chances would be a lot better, of course.
So how do you get your first high-limit card? First, you do your homework. You visit sites like creditboards.com, which has always been a favorite site of mine, and you figure out which creditors are known for giving out generous limits. Early on, I figured out that USAA, Pentagon Federal Credit Union, NASA Federal Credit Union, BMW, and others were excellent for granting solid initial limits. For me, Juniper turned out to be my first 5-figure credit limit. Not long thereafter, creditors were routinely granting me $10,000 limits and higher.
In addition to looking for creditors that are known for issuing high-limit cards, I also started combining cards that I had with just one issuer. For example, instead of keeping three Citibank cards, I have taken those three and combined them into one large-limit card (always trying to leave my oldest card as the card that survives, which helps preserve the age portion of my credit portfolio). Ditto with other credit-card companies. Now when I apply for new cards, issuers are more likely to grant me higher initial limits. After all, if I now have 12 cards, and all of them have an average limit of $25,000, then what is the point of a creditor giving me a $3,000 limit? It makes no sense. And that's why creditors constantly issue high-limit cards to me. It's simply a function of "higher limits begetting higher limits."
The higher-limit cards also help to keep my utilization ratios down. In one of my previous blog entries, I discussed the importance of utilization. The higher-limits-begets-higher-limits mantra plays into the utilization discussion perfectly.
Finally, the higher-limit cards, which help my utilization ratios, help to bolster my credit scores. Indeed, if you've got a bunch of cards with credit limits that are each above $25,000 it's tough to utilize much of the limit (that's especially true when you pay your bills in full each month). That in turn helps to keep your scores up. Keeping your score high means that it's much easier to get approved for new cards in the future.