Opinions on the merits of raising the credit limit on one’s credit cards?
I am at the point where both my credit cards (a VISA and an MC, in different currencies; I have lived in multiple countries) have a balance of essentially zero. I use them every month to pay subscriptions and occasional online purchases, but I pay the full balance every month now.
Since I’ve reached the point where I can regularly do that, the credit card companies have been sending me offers to increase my credit limit at a greater frequency.
Right now it’s ~10K (thumb conversion to USD) and I don’t feel the need for more, but I thought I’d ask and see what the prevailing wisdom is.
TL;DR: Raise credit card limit: YES/NO? Why/not?
The conventional wisdom is that if you are bad with credit and need hard limits to keep from over-spending, then do not raise your credit limit.
Otherwise, if you’re the kind of person who ignores credit limits because you’ve never hit one and you have complete control of your spending, raising your credit limit may increase your (US) credit score because it will increase your available credit ratio. Since credit card companies generally hold liability for fraudulent purchases, this should come at no additional risk. This will also make the occasional large purchase (that you plan to pay off immediately) a bit easier because you won’t have to break it up across cards and you’ll be able to get the benefit from rewards. Note: all of these answers are US based– we don’t know how credit card companies work in other countries. (And, as always, do your own research and/or talk with actual professionals before making any major money decisions. We are not actual professionals.)
Grumpy Nation: What do you do when the credit card company wants to raise your limits?