What to do when your credit limit is too low? | Question of the Week Ep15 | 9-7-26

Frequent Miler on the Air

This episode addresses a listener's dilemma with a newly approved Capital One Venture Business card that came with a $2,000 credit limit—far

Key takeaways

• Banks like Capital One may reject credit limit increase requests even when applicants offer to reduce limits on other cards.
• Cycling credit limits can trigger red flags for banks due to 'bust-out risk,' potentially leading to account closures.

Main topics

• Credit card limit management
• Cycling credit limits for sign-up bonuses

Notable quotes

"It's almost criminal... giving a credit limit that low when the spend requirement is so high."

Conclusion

While cycling is risky and not recommended long-term, listeners may need to do so temporarily to

Transcript preview

Speaker 2 (0:01) This is a Voyescape podcast. You can find all of our travel podcasts from around the world at voyescape.com. Speaker 4 (0:11) This week's question of the week, what to do when your credit limit is too low? Chris writes in and says, on your recent podcast, you mentioned that banks don't like you to cycle cards. I just got approved for the new Capital One Venture business and upon approval, found out... they had given me a credit limit of $2,000. This obviously is going to make it very difficult to make the minimum spend for the signup bonus. And obviously I can't if I don't cycle the card. I did try to call and request an increase and pointed out that I have a personal VentureX with a credit limit of $50,000 that's paid off in full every month. I asked for a credit increase and offered to decrease my VentureX credit limit, but was declined. So... What is Chris to do? I think that card she's referencing here had probably a spending requirement of something like $30,000 in the first six months. What can Chris do? Speaker 3 (1:06) Yeah, that's awful. So first of all, just this idea of offering a big welcome bonus that requires a huge amount of spend and then giving a credit limit that low is just, it's almost criminal. should not be how they, you know, it'd be better Speaker 2 (1:28) just to Speaker 3 (1:29) decline Speaker 2 (1:30) it, you know, if they're not willing to offer Speaker 3 (1:32) a big enough credit limit to get the, to make that minimum spend, that's just ridiculous. You know, first of all, I think Chris did exactly the right thing is call the bank and see if you can either you know, if they're willing to expand the credit or move credit from another card or, you know, something along those lines. You know, with Chase, for example, you can, if you have another business card that's also a credit card, this doesn't work with charge cards, but then you can actually move credit. They now allow that. online you could log into your account just move credit from another card but that's dependent on actually having those other cards so in this situation um i really think chris has no option but to cycle their limit which by that i mean spend up to the two thousand dollars pay their credit their credit card bill in advance to free up two thousand dollars more and and keep doing that Speaker 4 (2:40) Yeah. So that's what's known as cycling. It's using your entire credit limit, paying it off, using it again in the same billing cycle. It's called cycling. And generally speaking, Chris is right. We tend to advise against doing that. It's generally inadvisable because of a couple of things. First of all, it makes the banks. question what you're doing, it makes them nervous from the get-go. There's something called bust-out risk, which is the idea that somebody will charge up a bunch of their cards and then kind of disappear off to a tropical beach somewhere and never pay them