Return to site

 

Benefits to Increasing Your Credit Limit

Many people have the wrong idea about increasing your credit limit. Some think if you have more to spend then you will spend more. But there are advantages to increasing your credit limit if you can manage your finances well.

Credit Score Increases

With a higher credit limit your overall credit score will instantly improve. It lowers your credit utilization thus putting you under the 30% credit utilization threshold. It is always wise to stay below the 30% threshold to keep your credit score healthy - refer creditlimitincrease.citi.com.

The bottom line is the closer you get to your credit limit the more at risk you are considered to be. This is one reason why people elect to raise their credit limit so their score will drop. You just have to be careful and manage this new increase wiser.

Opportunity to Receive Better Credit

With a higher credit limit placing you under the 30% utilization threshold and with an improved credit score, you can now receive better credit cards. With a better credit score you seem responsible to financial lenders and you are deemed trustworthy for an upgraded credit card.

You will see credit card offers arrive in your mail on a regular basis. They will be offering you lower interest rates, higher credit limits, etc. This also qualifies for lower interest rates on loans and mortgages. If you are responsible this will give you more opportunities.

Great for Emergencies

With a higher credit limit you are well prepared for an emergency. If you don’t have the cash to pay for something then you can use your credit card instead. Many people their credit card to be their 6 month emergency fund if they don’t have the money saved.

For a lot of people this is their way of being protected in the event of an emergency. Their credit card with the higher credit limit is their lifesaver.

Rewards Increases

For cardholders that typically pay off their credit card balance at the end of each month having a card with a higher limit is a benefit. You can add more bills or expenses to your credit card which will grow your rewards points.

People that never carry a card balance from month to month and have recurring expenses enjoy the rewards benefits they earn. Accruing these rewards points can help pay for vacations, gifts, hotels, etc.

All Posts
×

Almost done…

We just sent you an email. Please click the link in the email to confirm your subscription!

OKSubscriptions powered by Strikingly