Why You Should Consider Lowering Your Chase Credit Card Limits

If you're looking to apply for a Chase credit card, it's an unwritten rule that Chase will typically issue up to 50% of your income across all personal Chase credit cards.  

Once you start building a history with Chase, sometimes it might seem like they're trying to issue as close to the 50% limit as possible.

EXAMPLE 1

Income = $40,000
"Cap"  = $20,000

If your annual income is $40,000, then the maximum credit limit Chase will issue across all personal Chase credit cards is typically $20,000.

Event 1:

  •   $1,000 = Chase Freedom
  •   $4,000 = Chase Freedom Unlimited
  •   $5,000 = Total credit limit
  • $15,000 = "room" (available credit limit to be issued) ($20,000 - $5,000)

Let's say you get the Chase Freedom and the Chase Freedom Unlimited. The combined credit limit they issue is $5,000 for both cards. The remainder available credit limit to be issued is $15,000.

Event 2:

  • $6,000 = Marriott
  • $11,000 = Total credit limit (F+FU+M)
  • $9,000 = "room" ($20,000 - $11,000)

After the Chase Freedom cards, you applied for the Marriott Rewards card and got approved for a credit limit of $6,000.

You total credit limit across all Chase accounts is now $11,000. This means that you have $9,000 left to be issued.

The problem is that if you want to apply for a Visa Infinite card like the Chase Ritz-Carlton or the Chase Sapphire Reserve, the minimum credit limit you need is $10,000.

To "carve" room for the Visa Infinite card, you can decrease your credit limits on your other cards. 

Carving Room:

  • Marriott Rewards = $6,000 to $5,000 ($1,000 decrease)
  • Room = $9,000 (previous) + $1,000 (carved) = $10,000
  • Min starting CL for Ritz/CSR = $10,000

EXAMPLE 2

Income = $20,000
"Cap"  = $10,000

In this example, your income is $20,000, so Chase will issue a total credit limit of $10,000 across all personal cards.

Event 1:

  •   $2,000 = Freedom
  •   $6,000 = Freedom Unlimited
  •   $8,000 = Total credit limit

If you apply for the Chase Freedom cards to build a history with Chase and they issue a combined credit limit of $8,000, you'll only have $2,000 of "room" left.

$2,000 = room ($10,000 - $8,000)

Carving Room:

  • Freedom Unlimited = $6,000 to $3,000 ($3,000 decrease)
  • Room = $5,000 ($2,000 previous + $3,000 carved)

If you wanted to get the Chase Trifecta and get the Chase Sapphire Preferred, you would have to decrease your credit limits in order to meet the minimum credit limit requirement of $5,000 (minimum credit limit for Visa Signature cards). 

EXAMPLE 3

Income = $100,000
Cap = $50,000
Current Credit Limit = $30,000
Room = $20,000

In this example, your income is $100,000, so the credit limit cap is $50,000. Let's say you want to get both the Chase Hyatt and the Chase IHG cards.

Event 1:

  • Apply for Hyatt and Chase will likely grant you a $20,000 credit limit

Carving Room

  • Lower the Hyatt card from $20,000 to $5,000. = $15,000 of room.

This way, they can open the IHG card without having to shift limits via the recon line.

Advanced Carving
Instead of lowering the Chase Hyatt from $20,000 to $5,000 ($15,000 of room), lower it to $10,000 ($10,000 of room).

This way, if you still need to go through recon, you have $5,000 available to be shifted from the Hyatt to the IHG card to get it open.