Do I have too much available credit?
For some background, I'm a recent graduate doing mostly freelance work while teaching English on the side in France. My freelance work grosses me about ,000/year, and my job in France is about ,000/year (very part-time).
In total, I have the following credit available to me:
0 credit card with my bank
,000 credit card with my bank
,000 credit card with Amazon/Chase bank (special promotion)
,000 credit card with Apple/Barclay bank (special promotion, used to buy work computer)
,900 PLOC with my bank
Total: ,200
In essence, my credit available is almost 50% of my gross annual income. I don't even come close to using even 10% of the credit at a given time, and always pay my balance off in full at least a week before the actual due date. In fact, I usually pay off the balance in full very soon after purchases are made in order to carry a [CO] balance at all times. Needless to say, I'm responsible with my money and don't spend what I don't have.
But I fear that in the future, if I go to apply for loans for a car or house or whatever it may be, that lenders may see my available credit as a risk.
Do I have too much credit?
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Do I have too much credit?
No. Lenders determine your ability to pay based on the balances you owe, the income you earn, and your history of using credit (on-time payments, age of accounts, utilization), not on how much available credit you have. Too little available credit makes it harder to keep utilization low.
If you recently opened a large number of accounts drastically increasing your available credit, a lender would view that as a risk, so it's generally advised not to open new lines of credit shortly before applying for car/home loans.
Otherwise, old accounts with low-utilization do not hurt you. Incidentally 0% utilization does not help you as much as 1-10% utilization, but it's not worth fussing over in my opinion.
For people that aren't as responsible/disciplined, more available credit can lead to increase spending that they cannot afford, so it can be problematic.
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