One drawback is that you have more leeway credit card.
Your credit limit is the maximum amount that you can borrow to pay on your credit card, and increase it will mean you have more money to go to – it can be both good and bad .
If you have one credit card for quite some time, there is a good chance that you may qualify for than when you first signed more favorable conditions. Once your account has been in good standing, at least six months, you can call your credit card issuing bank and request that your credit limit increase. If you are a customer responsible and has to pay the bills on time, you might get what you want.
But with greater flexibility is good, there is a drawback has room to maneuver, but charge you cREDIT card.
How to improve credit can help you
Having overcharged on your credit card can benefit your ability in several ways.
1. You have to
More choices in an emergency situation In an ideal world, you’ll have a solid emergency fund to tap into unplanned expenses. In reality, many people do not have much money to save cramped. If, in this case, a higher credit card limit to provide you with more room to maneuver, including unexpected bills, regardless of their family-related, car-related, or health-related in nature.
2. Higher credit limit can improve your credit score
There are five factors into the calculation of your credit score, one of which is your credit utilization, or to the extent that you use REVOL Wing credit. Your credit utilization should be below 30%, in order to avoid negative impact on your score. In general, the lower your utilization, the better – as long as you keep the 0% or more. Have a higher credit limit, the more likely you are to make use of the favorable territory.
If you owe $ 4,000 credit limit of $ 10,000, you are at 40% utilization, which is not great. However, if you try to get your credit limit raised to $ 12,000, you do not increase your balance, you will be at 30% utilization.Obtain higher credit score can help you without you have to pay off any existing debt.
How to improve credit can hurt you
Although there is room for growth to increase your credit line, be allowed to overcharge you credit CARD may also bring some negative effects.
1. You may be more inclined to overspend
When you give a credit card limit is $ 3000, you can charge on the card of up to $ 3,000. When the limit is increased to $ 5,000, you suddenly open the door to additional charge of $ 2,000. If you have a tendency to give in to the temptation of shopping before, then you should not be required to relax the restrictions.
2. You could end up hurting your credit score
A higher credit card limit may translate into more debt, when you climb balance, guess what your utilization will happen? That’s right – it goes out, your score will drop.
In addition, racking up a higher balance so that you can not keep up with the risk of your minimum credit card payments. Fall behind, and payment history will take the set. Payment history is the most important factor in calculating your credit score, so any missed payments can send digital plunge downward.
If you ask a credit card limit increase?
If you believe in yourself responsibly manage your spending, you increase your credit card limit may be a useful initiative. However, if you want to go overboard spending tendencies, then you may be better off leaving your existing restrictions.