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It can be quite flattering when your credit card company sends you a notification in the mail saying you are eligible for a credit line increase. Obviously, the company thinks you're doing a great job managing your credit card — or, at the very least, you're paying the minimum balance. However, before you get too flattered by your credit card company's approval of a higher spending limit, figure out if it's the right decision for your finances.
Getting a higher credit limit can give you more spending power and can also increase your credit score. But for the many benefits of a higher limit, there are several dangers to be aware of, too.
@SMSgt Minister Gerald A. Thomas , Capt Christopher Mueller , CPT (Join to see) , COL Mikel J. Burroughs , Sgt Joe LaBranche , SSgt (Join to see) , Capt Seid Waddell , SrA Christopher Wright LTC Stephen F. PO2 Ed C. PO2 Mark Saffell MSG Tom Earley PVT James Strait Alan K. PO1 William "Chip" Nagel @SGT John McConnell SGT John " Mac " McConnell , SSG Leo Bell , SGT David A. 'Cowboy' Groth, TSgt Melissa Post
Getting a higher credit limit can give you more spending power and can also increase your credit score. But for the many benefits of a higher limit, there are several dangers to be aware of, too.
@SMSgt Minister Gerald A. Thomas , Capt Christopher Mueller , CPT (Join to see) , COL Mikel J. Burroughs , Sgt Joe LaBranche , SSgt (Join to see) , Capt Seid Waddell , SrA Christopher Wright LTC Stephen F. PO2 Ed C. PO2 Mark Saffell MSG Tom Earley PVT James Strait Alan K. PO1 William "Chip" Nagel @SGT John McConnell SGT John " Mac " McConnell , SSG Leo Bell , SGT David A. 'Cowboy' Groth, TSgt Melissa Post
4 Dangers of Increasing Your Credit Card Limit
Posted from military.com
Money
Budget
Finance
Posted >1 y ago
Responses: 5
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No matter how much you have getting addicted to credit cards ; it is worse than drugs or alcohol.
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Thanks for sharing SP5 Mark Kuzinski the four dangers seem to be true especially #1 and #3.
1. You'll Have a Higher Chance of Debt. Higher credit card spending limits lure many people into a false sense of security.
2. You'll Ignore Better Promotions
3. Limited Loan Availability. Being considered a “high-limit borrower” affects how you qualify for mortgage and car loans.
4. Someone Else Could Rack Up Debt
1. You'll Have a Higher Chance of Debt. Higher credit card spending limits lure many people into a false sense of security.
2. You'll Ignore Better Promotions
3. Limited Loan Availability. Being considered a “high-limit borrower” affects how you qualify for mortgage and car loans.
4. Someone Else Could Rack Up Debt
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I was once turned down for a mortgage because I had too much credit available, even though I wasn't using it. The banks look at the credit limit as having been borrowed, since it can be very easily. At least that is how it was explained to me. Cancelling unused credit cards fixed the problem for me.
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