Chase Shutdown: Why You Should Lower Credit Limits

By Gavin | October 12, 2018

We're going to talk about that you might want to decrease your credit limits of Chase especially if you're looking to apply for a new Chase card.

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The main goal here is to make approvals as easy as possible

The first thing I want to make clear is that this post is targeted towards people who either have lower incomes or people who are in the mid-game or late-game. The main goal here is to make approvals as easy as possible and to minimize the work you need to do, the main reason for this post and for this strategy as a whole is that Chase is typically going to give you about 50% of your income as a total credit limit among all personal Chase cards.

So here we're looking at only personal cards as well as only Chase cards, but all of them as a whole this is not a hard rule. For some people, it's going to be 25%, for some people it might be a hundred percent, but I think for most people it's going to be around 50%. This means that if you make $40,000, the most they typically want to give you among all Chase cards personal ones is going to be about $20,000, the other part of it too is that once you start building up experience of Chase it sometimes feels like they're trying to get you up to that 50% limit as fast as possible.

Let's run through an example of someone

Let's run through an example of someone who has $40,000 as a credit limit, let's say they applied for the freedom card and they ended up getting approved with $1,000 credit limit, they build up some experience and then they apply for the free unlimited, and that's let's say four thousand dollars. so in total, we're at five thousand dollars and you're pretty far away from that cap.

Let's say the next card that you apply for one card, and they gave you a $6,000 credit limit, so in total, you have 1,000 to 4,000 and 6,000, so $11,000 as a total credit limit among all these cards. This means that you have $9,000 left as a total credit limit to be issued, and again you run into a few problems just because if you want a card like the Chase Sapphire Reserve which has a minimum credit limit issuance of $10,000.

Then it's going to be a bit harder if you applied online

Then it's going to be a bit harder if you applied online, you'd probably end up getting rejected or even if you apply it in branch same thing. What you would typically need to do is to cut a reconsideration line, and then they would have to reallocate credit their side given, that reconsideration calls can typically take between 10 to 30 minutes, it's not worth the effort just to reallocate it. When you could have decreased their credit limits by let's say $1,000 and go approved automatically, if it's someone with a lower income then this issue ends up compounding, so let's say you make $20,000 so in total Chase is going to give you $10,000 as a credit limit.

Let's say your goal is to get the Chase card, and then you apply for the freedom card where you got $2,000 and the free unlimited where you got $6,000 as a credit limit, this ends up being very problematic just because if you apply for the Chase Sapphire Preferred they can't give you that extra $5,000 that you need as a new credit limit. In this situation, I'd recommend carving out about $5,000 in credit limit, that way they can issue it to you.

I realize that this might be a bit confusing, but idea is that you want to be able to carve out room, that way they can grant your credit. If for someone who already has a lot of credit then they're not going to be able to give you more because you're already at that cap.

The next card that you will apply for you is typically going to be granted about $20,000, just because Chase trusts you not necessarily a problem. But again if you wanted another card after that, so let's say you were going for the high card and the IHG card, you're going to run into issues because you're going to have to go through reconsideration.

I'd recommend carving out $5,000 as a credit limit

In that case, I'd recommend carving out $5,000 as a credit limit, that way you don't need to call the reconsideration line. One thing I've kind of noticed more to as especially, once they start adding in more cards reconsiderations get a bit weirder. just because they're thinking why do you need all these cards, and also the other thing isn't even the number of cards, it's more, the available credit limit.

Given that we're not actively using $50,000 of credit limit every single month, it doesn't matter. If you do fall into this higher income group you might want to leave &5,000 in available credit limit, that way if you do need to call reconsideration you can offer to move that over.

This probably seems like a very specific post, but one of the reasons why I really want to make it is just because I have gotten a few questions about why sometimes Chase will be like they'll give you $12,000 as a credit limit, and then the card afterward they end up getting something like $500. If you run into our problem like this, it means that you're going against a cap, so you're hitting the top. So again I just recommend lowering your credit limits, it makes her life a lot easier, hope that was helpful.