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January 6, 2007 2:41 PM Subscribe
Why would I need $80,000 in credit?
posted by backseatpilot to Work & Money (27 answers total) 4 users marked this as a favorite
I got in to a conversation with a coworker the other day about credit. I believe it stared with the notion of using credit cards sparingly to build up a credit history. At any rate, during the course of the conversation he mentioned he has a credit limit of about eighty grand spread over several cards.
I have one credit card with less than two thousand dollars credit available to me. While this is a result of a lack of credit history (I avoided cards as much as possible until I got screwed on my auto loan), it got me thinking. I put about two hundred dollars on my card every month and pay the balance off in full. I really only use it for business expenses and one or two purchases a month to build up my credit history. I can't imagine ever needing a credit limit that's almost 50% more than my yearly salary.
So, why would anyone need a huge credit limit? Is this just a cause (or effect) of the spend-more-than-you-make society nowadays? Is there a practical use for it? Is it possible to get low enough rates on credit cards that it would be more beneficial to use them than, say, taking out a loan from a bank?