[quote=flu]On second thoughts….Not that I would consider this personally…But I guess someone in serious financial doo-doo…
Hypothetical situation. Let’s say some person has no house to HELOC…. No chance of ownership…Let’s say the person has no savings, no IRA….And has a job that doesn’t really depend on having stellar credit.
But the person has 10 credit cards with $10000 credit line each.
Maybe works out for them is to cash out all credit cards on credit line, and put that money into the IRA….10 credit cards $3000 each say $30000 into an IRA, invested wisely…File BK.
Why? Because perhaps even after one files BK, retirement accounts are off limits.
Not that I personally would recommend this… But just saying….If someone is really desperate.
Chances are, they won’t even go to BK court, but will settle with the collector at much less than owed.[/quote]
flu, the vast majority of cc lenders today have cut down nearly EVERY cardholder’s credit limit, whether or not the account is active or the upper-limits were ever used. This is involuntary and was done to the accounts of the “rich” and “poor” alike.
The cc companies have now realized that too much credit was extended to a lot of people during the millenium boom and are trying to avoid having any more big losses resulting from the mistakes they made in the past.
A cc lender typically runs the credit report of all its cardholders periodically, even if they are current on their payments. Someone who has managed to obtain 10 cards with a $10K-each credit limit AFTER acquiring the card who is checking the credit is a BIG RED FLAG. It gives the impression that the cardholder is amassing a “war chest” so they can default and/or is trying to scam each card account they have by borrowing cash from one card to make payments on another, etc.
cc companies are now wise to the scams of yesteryear. Low FICO score applicants are now either rejected outright or have to post their own money with the cc company to get a “secured card” in order to build their credit back up.
The days of one being able to obtain several high-limit cc’s in a short period of time are over, IMHO.
Card companies like AMEX and Visa Signature (which have no upper limit) constantly review the appropriate limit for its cardholders, based upon repayment record and known regular income and assets. If one walks into any retail establishment and tries to buy something with one of these cards which is REALLY expensive (could be over $500 to over $2K, depending on type of card program and cardholder record), the establishment will have to call for approval first and the cc company may text or call the cardholder to ask them if that is actually them wanting to purchase the item/service. This is done to prevent fraud.
I just don’t see how anyone with ten cards still has a $10K+ credit limit on any of them today.
