Credit Card Limits, and theory

[appel]

Hey,

I'm wondering if there is a typical upper limit/max to credit card limits in South Africa.

Apart from salary of course....

Anecdotal evidence looking at my unemployed father, salary does not really matter with ABSA once you are granted a credit card.

Started at R40k limit 2 ago years when he received an estate payout, now at around R90k, has not been employed in over 7 years.

Card has never been paid in full, but as long as the minimum amount or more is paid monthly, they will offer you an increase around every 4 months.
Anyway, I'm wondering if there is a max.

Like is it possible to have a 500k/1M credit limit, because if so it actually opens some potentially clever possibilities.

New car of R250,000 on Credit Card at 9% interest

Vehicle loan of R250,000 from bank at 15% interest

Poll attached asking YOUR credit limit, but also interested in the questions above.
It's fairly common dogma to state: "Credit card is the worst", but I'm wondering about that now...

 

[Gtx Gaming]

Mine is 150k but also have Fusion facility at 100k. Im sure the okes big salaries does have that 500k to 1bar credit card limit.

 

[appel]

Mine is 150k but also have Fusion facility at 100k. Im sure the okes big salaries does have that 500k to 1bar credit card limit.

I have 2x cards both around R150k (started with only one at 80k around than 2 years ago.)
Not a humble brag (though it could be haha), just mainly curious if there is some upper limit.
If not, then would it not make sense to swipe that new car on credit card versus vehicle finance for example?

In my case both cards are 9% interest.
Vehicle finance looks like at least 12% if lucky.
[edit] Apparently Investec offers credit cards fixed @ prime. So 7.5% at time of post. I can't imagine a vehicle finance loan being that low.... [/edit]

Plus, whatever is paid to the credit card is immediately available again...where other loans just subtract for the duration. Obviously a trap, but at least there is a choice...

 

[UrBaN963]

Anybody accepting vehicle finance at 15% shouldn't be financing anything.

The other thing is the vehicle finance is a loan agreement for a fixed term. A credit card, they could theoretically call for full payment whenever they wanted to.

 

[emptybruwer]

Cc st R250 k and overdraft of R120 k. But rate isnt great

 

[Messugga]

Hey,

I'm wondering if there is a typical upper limit/max to credit card limits in South Africa.

Apart from salary of course....

Anecdotal evidence looking at my unemployed father, salary does not really matter with ABSA once you are granted a credit card.

Started at R40k limit 2 ago years when he received an estate payout, now at around R90k, has not been employed in over 7 years.

Card has never been paid in full, but as long as the minimum amount or more is paid monthly, they will offer you an increase around every 4 months.
Anyway, I'm wondering if there is a max.

Like is it possible to have a 500k/1M credit limit, because if so it actually opens some potentially clever possibilities.

New car of R250,000 on Credit Card at 9% interest

Vehicle loan of R250,000 from bank at 15% interest

Poll attached asking YOUR credit limit, but also interested in the questions above.
It's fairly common dogma to state: "Credit card is the worst", but I'm wondering about that now...

There are unlimited amount offerings in SA.

 

[Other Pineapple Smurf]

I've been without a CC for more than three years now but I do enjoy seeing how much FNB is willing to throw at me.

Mine actually went down, well the offer went down from a high of R350K in 2019.

I've a perfect credit score but banking behaviour influences my risk profile - I noticed they punished me for upgrading from Private Client to Gold account (now on Premium).

Even though I'm no longer on PrivateClient, I still get treated as PC client for bond applications. I got a good rate for my second property last year. I see I can buy a third property for R3m now.

 

[Gtx Gaming]

I've been without a CC for more than three years now but I do enjoy seeing how much FNB is willing to throw at me.

Mine actually went down, well the offer went down from a high of R350K in 2019.

I've a perfect credit score but banking behaviour influences my risk profile - I noticed they punished me for upgrading from Private Client to Gold account (now on Premium).

Even though I'm no longer on PrivateClient, I still get treated as PC client for bond applications. I got a good rate for my second property last year. I see I can buy a third property for R3m now.


View attachment 1312222

Should use the credit buy off the grid the system so you can delete the loadshedding app

 

[Thor]

I have 2x cards both around R150k (started with only one at 80k around than 2 years ago.)
Not a humble brag (though it could be haha), just mainly curious if there is some upper limit.
If not, then would it not make sense to swipe that new car on credit card versus vehicle finance for example?

In my case both cards are 9% interest.
Vehicle finance looks like at least 12% if lucky.
[edit] Apparently Investec offers credit cards fixed @ prime. So 7.5% at time of post. I can't imagine a vehicle finance loan being that low.... [/edit]

Plus, whatever is paid to the credit card is immediately available again...where other loans just subtract for the duration. Obviously a trap, but at least there is a choice...

The fixed rate will be much higher than the current rate. ( Bank doesn't lose money )

 

[appel]

Anybody accepting vehicle finance at 15% shouldn't be financing anything.

The other thing is the vehicle finance is a loan agreement for a fixed term. A credit card, they could theoretically call for full payment whenever they wanted to.

In your experience, is vehicle finance interest lower or higher than a credit card?

Maybe I'm just lucky, but when exploring calculators I can't see vehicle finance under 10%

 

[Snyper564]

I typically run loads of crypto related goodies through my account.

Have 3 credit cards.

FNB R250k
BA R160k
WW R160k

Fusion acc R120k

Home loan is sub prime and so is my FNB credit card but actually has a better rate than my HL



On my side all my cards are always settled every month I incur 0 interest. Cash is king but 55 days free cashflow is better

 

[appel]

I've been without a CC for more than three years now but I do enjoy seeing how much FNB is willing to throw at me.

Mine actually went down, well the offer went down from a high of R350K in 2019.

I've a perfect credit score but banking behaviour influences my risk profile - I noticed they punished me for upgrading from Private Client to Gold account (now on Premium).

Even though I'm no longer on PrivateClient, I still get treated as PC client for bond applications. I got a good rate for my second property last year. I see I can buy a third property for R3m now.


View attachment 1312222

Nice, reading carefully I see 'may qualify' and 'approved for'.

Guessing if you click the offer that is approved it would be instant.
So, that same offer was R350,000 a couple of years ago.

So far, that is the highest single card limit in the thread/poll. Ty

 

[Messugga]

In your experience, is vehicle finance interest lower or higher than a credit card?

Maybe I'm just lucky, but when exploring calculators I can't see vehicle finance under 10%

Secured loans will generally have better interest rates than unsecured loans. Vehicle financing uses the car as security, so it's lower risk for the bank. Thus capital witholding requirements are lower. Thus cost of lending is lower. Voila. Lower interest rates.

 

[appel]

Secured loans will generally have better interest rates than unsecured loans. Vehicle financing uses the car as security, so it's lower risk for the bank. Thus capital witholding requirements are lower. Thus cost of lending is lower. Voila. Lower interest rates.

Makes sense of course.

I mean, a bond is typically the lowest interest rate due to both being secured and super long term.
But in reality, is this true for vehicle finance?

I can accept it might be lower or equal to credit card.

Guess if I could rephrase:

What disadvantage is there with the credit card in this hypothetical situation?

Finance 200k @ 10%
Credit card 200k @ 10%

 

[Messugga]

Nice, reading carefully I see 'may qualify' and 'approved for'.

Guessing if you click the offer that is approved it would be instant.
So, that same offer was R350,000 a couple of years ago.

So far, that is the highest single card limit in the thread/poll. Ty

I've seen credit limits of seven figures and I've seen unlimited credit limits on cards as well. HNW gets crazy.

 

[Snyper564]

Makes sense of course.

I mean, a bond is typically the lowest interest rate due to both being secured and super long term.
But in reality, is this true for vehicle finance?

I can accept it might be lower or equal to credit card.

Guess if I could rephrase:

What disadvantage is there with the credit card in this hypothetical situation?

Finance 200k @ 10%
Credit card 200k @ 10%

If terms are the same and % is the same then there is no benefit of one over the other

 

[Messugga]

Makes sense of course.

But in reality, is this true?

I mean, a bond is typically the lowest interest rate due to both being secured and super long term.
But I accept it might be lower or equal to credit card.

Guess if I could rephrase:

What disadvantage is there with the credit card in this hypothetical situation?

Finance 200k @ 10%
Credit card 200k @ 10%

Yes, it's true, because that's just how BASEL works. I've worked on enough credit models around this stuff to have somewhat of a good idea around its impact.

For you as a client there is nothing negative about the card that I can immediately think of. For the bank - they won't make as much money.

 

[appel]

I typically run loads of crypto related goodies through my account.

Have 3 credit cards.

FNB R250k
BA R160k
WW R160k

Fusion acc R120k

Home loan is sub prime and so is my FNB credit card but actually has a better rate than my HL

View attachment 1312236

On my side all my cards are always settled every month I incur 0 interest. Cash is king but 55 days free cashflow is better

Nice! Credit card lower than bond, that's awesome!
Question:

Are some/all of these cards 'revolving'?
Example:

FNB Limit 250k
Swipe for 20k
Visible balance R230k
Pay R5k into it
Visible balance R235k
(Assume above within 55 day so we don't consider the tiny interest)

Probably silly, and I suppose "YES", but one of my EX'es had a credit card, and it actually worked like a usual loan. Limit reached, 0 balance until repaid in full.

 

[appel]

If terms are the same and % is the same then there is no benefit of one over the other

The credit card won't have a specific term, where the vehicle finance would.

I just realized that any other purchases on the credit card would be compounding out of order, where the financing option would be limited/specific to the big purchase itself.

So I guess that could be a negative with credit card? But might be offset by lack of set term, and revolving nature of card.

 

[Snyper564]

Nice! Credit card lower than bond, that's awesome!
Question:

Are some/all of these cards 'revolving'?
Example:

FNB Limit 250k
Swipe for 20k
Visible balance R230k
Pay R5k into it
Visible balance R235k
(Assume above within 55 day so we don't consider the tiny interest)

Probably silly, and I suppose "YES", but one of my EX'es had a credit card, and it actually worked like a usual loan. Limit reached, 0 balance until repaid in full.

Yeah not sure if revolving is the correct terms as I dont touch personal loans when I top up its the new bal. It never hits 0 unless I drive it down there