Core Insights - A Reddit user with a high FICO score of 798 was denied a personal loan by Citi due to low balances on revolving accounts, despite a strong credit history and timely payments [1][2] - The denial was attributed to the user's practice of paying off credit card balances before the statement closing date, resulting in a reported zero balance and perceived inactivity by lenders [2][3] Group 1: Credit Utilization and Reporting - Credit card issuers report balances to credit bureaus on the statement closing date, not the due date, which can lead to misunderstandings about credit usage [2] - Maintaining a small balance on credit cards can demonstrate responsible usage to lenders, as opposed to paying off the balance entirely before the statement [3] Group 2: Lender Perceptions - Lenders may view applicants with no visible debt as suspicious, which can impact loan approval decisions [4] - The general consensus among commenters suggests that allowing a small balance to report each month can improve the chances of loan approval while avoiding interest charges [3]

Core Insights - A high credit limit can positively impact credit scores by lowering the credit utilization ratio, which lenders prefer to see at 30% or less of available credit [1][2][3][20] - Increased credit limits provide more purchasing power and can lead to earning more rewards on everyday spending [4][5][6][20] Pros of High Credit Limits - **Lower Credit Utilization**: Higher total credit reduces the utilization ratio, which is beneficial for credit scores [2][3] - **Increased Purchasing Power**: More available credit allows for larger purchases, which can be useful for significant expenses like moving into a new home [4] - **More Rewards**: Higher spending limits can lead to more cash back or rewards points, especially with rewards credit cards [5][6] - **Emergency Fund**: Credit cards can serve as a temporary financial resource during emergencies [7] Cons of High Credit Limits - **Potential for Increased Debt**: Higher credit limits can lead to overspending and accumulating more debt if not managed properly [8][10][20] - **Hard Credit Check**: Requesting a credit limit increase or applying for a new card typically results in a hard inquiry, which may temporarily lower credit scores [11][20] Strategies to Increase Credit Limits - **Request a Credit Limit Increase**: Existing cardholders can request an increase through their credit card issuer [12][13] - **Automatic Credit Limit Increases**: Some issuers may automatically increase limits based on account activity without negatively impacting credit scores [14][15] - **Open a New Credit Card**: Applying for a new card can also increase overall credit limits, though it usually involves a hard credit check [16] High-Limit Credit Cards - **Business Credit Cards**: Small business owners often qualify for higher credit limits, typically starting at $5,000 [17][19] - **Premium Travel Cards**: Cards like Chase Sapphire Reserve and Capital One Venture X are known for offering some of the highest credit limits [19]

Core Points - Closing a credit card can be a straightforward process but may impact credit scores, making it essential to understand the implications before proceeding [1][12] Group 1: Steps to Cancel a Credit Card - Review the cardmember agreement for specific cancellation instructions and reward handling [3] - Redeem any accrued rewards before closing the card to avoid losing them [4] - Pay off the balance in full prior to cancellation, as most issuers require this [5] - Contact customer service to officially close the account and verify identity [5][6] - Cut up the physical card to prevent fraudulent use after closure [7] - Update any recurring payments linked to the card to avoid missed payments [8][9] - Check the credit report after closure to confirm the account status [10][11] Group 2: Impact on Credit - Closing a credit card reduces available credit and can increase credit utilization, which affects approximately 30% of the FICO credit score [13] - An example illustrates that closing a card can raise credit utilization from 32% to 47.5%, potentially affecting loan approval chances [14][15] Group 3: Reasons to Cancel a Credit Card - Closing a card may be necessary during a divorce to eliminate shared financial responsibility [16] - High fees associated with certain cards can justify cancellation, especially if the card is not frequently used [17] - A product change may be a better option than cancellation to maintain credit history while reducing fees [18][19] - Fraud victims may need to cancel a card to protect against unauthorized charges [21] - Changes in card structure, such as unfavorable terms, can warrant closure [22] - Psychological factors, such as overspending temptation, may lead individuals to close accounts [23] Group 4: Managing Credit Cards - While closing a card can lower credit scores, it may be beneficial for managing high fees or spending habits [24]