| A full time college student like Icarus maxing out a 6,000 credit limit "many times" in order to get the limit increased? Two cards? High FICO score?
Wow. Where do I begin?
- First, Icarus, what you posted in NOT your FICO score. It is a credit score perhaps similar to, but probably higher than, your FICO score. There have been recent articles about this. Suffice to say the true FICO score is quite proprietary.
- Getting high credit limits isn't a game, IMHO. I applaud your discipline for paying off in full every month. Be aware, though, that high credit limits can work against you in getting future credit. A prospective lender will look at your overall borrowing ability and decide that your income level could not support payment of all your available credit if you maxed out all your cards, and support new credit.
- Be aware that prospective creditors look at much more than just a credit score in making credit decisions - history length, debt/income ratios, time on job etc. So don't kid yourself that having a card and making prompt payments is the only important thing. I suspect it is more balanced: having a card can help or hurt, but is not the full story.
This decision is an intensely personal one - personal, ultimately, to the student, as we parents do not have any real control. We only advise, and live with the outcomes, through our kids, or personally, if we help out, if things go bad.
For every Icarus who is responsible, I suspect there is a kid like "cautionary tale" who screws up. And the reason companies shower college kids with credit offers is because these same companies know that college kids are still (statistically speaking) highly dependent on parents with far greater financial resources who will bail their kids out. So the issuers get the best of all worlds - high fee income from "problems" (late payments etc. are where the real money is) coupled with very low credit risk. Peer pressure (miss the spring break trip? don't worry, you can always pay it back later...) is a real issue. |