Should you accept a credit card increase?

Recently I logged into my credit card account and saw a link that said I qualified for a higher credit limit on my account.

Typically, in the past, I have received notices in the mail that said “I may qualify for a higher limit, call now for details”.  I never did, of course, as I liked my modest limit and felt it was manageable, so why would I entertain a higher amount?

This is a first for me, to log into my online credit card account and at the push of a button, my credit limit would increase by $3,000.  Not a huge amount but it was obviously more than what I presently have or was used to.

I don’t carry any debt on my credit card as I have it mainly for emergencies or those one off purchases that can only be made using a credit card (then within days, I transfer the money from my bank account to pay off the debt).

my first thought was why not?  But before I clicked on the ‘accept’ button, I wanted to do some research to find out the pros and cons as to whether or not it’s a good idea since I have never been in this position before.

I can across Credit Cards Canada and they outlined exactly what information I was seeking.

*Psst; this website has a lot more information and is full of great tips and tricks.

One of the advantages to accepting a higher credit limit was Credit Utilization.  I was not familiar with this term so it was great to be able to read how it affects my credit score with Transunion and Equifax.

Credit utilization is calculated by dividing your outstanding debt by your available credit. The lower your credit utilization, the higher your credit score should be.

In the end, I decided to accept the increase on my credit card.

For my own peace of mind, I still tell myself that I have a lower limit to avoid temptation.  Thinking I still have the lower limit keeps me in my spending comfort zone, reduces temptation and I’ve had the same limit for years so nothing changes (especially my spending habits) regardless of what my online account says.  Just helps me stay in check.

Have you ever had the option to increase your limit?  What did you decide was the right decision for you?



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