Is a credit limit increase a good idea for you?
20 June 2008
A credit limit is the maximum amount of credit that your financial institution will extend to you for your credit cards. This amount is decided upon after the financial institution assesses your financial status when you apply for the credit cards.
Credit limit increases may be considered after you have been with your financial institution for some time. Some places offer them to you directly. If you've received such an offer, you need to consider if carefully.
While having increased credit can be extremely useful, it is not a sign to go spending up big on your credit cards. It is only giving you access to an increased amount in case you need it. If you can't pay back the debt, then the credit limit increase will not work in your favour.
If you want to be considered for a credit limit increase on your credit cards, make sure you:
- Prove you can handle paying back your debt.
- Use your credit cards regularly.
- Always avoid late payments.
- Confirm with your lender what their rules are for credit limit increases on their credit cards.
Browse through our Banks and Issuers page to find out who has the best credit card deal for you and find out who has the best credit card features to suit you.
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