Credit Card Limit Increase Pros and Cons

Credit Card Limit Increase Pros and Cons

Having a credit card offers a number of benefits. Not only do you have access to finance in the event of an emergency, but you can also make large purchases, pay them off over a set period of time and earn rewards in the process.

Having a credit card also means that you need to be disciplined about your spending habits. A credit card limit is one of the ways in which credit card providers protect customers.

Opting for a credit card limit increase can also have its pros and cons.

What are the pros?

  • It can be useful for financial emergencies
  • You may get to earn reward points on major purchases
  • It makes it more convenient when you need to pay for bigger expenses
  • You’re less likely to go over your limit when it’s set at a high amount
  • You can improve your credit score, with the right amount of discipline

The cons of a credit card limit increase:

You may get yourself into more debt. If you’re constantly carrying a balance on your credit card and you’re only paying the minimum you may end up in a debt cycle.

Choosing a credit card limit increase could lead to overspending, especially if you aren’t disciplined enough.

You have a bigger risk of high interest rates.

Credit card tips:

Don’t let your credit card debt snowball and get out of control.  By increasing your credit card limit, this could tempt you to spend beyond your means, so you need to be disciplined.

Keep your credit card details and personal information safe at all times. If you lose your card, or if it’s stolen, fraudsters may gain access to your credit. So if you increase your limit, you need to beware of the possibility of becoming liable for purchases made on your card without your permission.


Categories: Credit cards