Tips On Adjusting Your Credit Limit
By Peter J Kenny
Using cards effectively often depends on the level of that you have, and how you spend that credit. There are times when you might need to increase your limit, and times when you might need to reduce it. If you are unsure about how to adjust your limit to suit your needs, then follow this simple advice in order to know when to adjust your limits.
What are your current limits?
Before knowing whether you should adjust your limit, you should work out what the limits on your cards are currently. Knowing exactly how much you have will help you to determine whether you need to raise or reduce your limit, or keep it the same.
Increasing limits
If you find that your current limits are not large enough for your needs, then perhaps it is time to increase your limit. If you have a good score and have always paid on time, then you are much more likely to be eligible for an increase. Contact your card issuers and find out if you can get an increase. If you are unable to get an increase but feel that you really need one and can afford it, then look into getting an additional card.
Reducing limits
If you have recently paid off card debts or you have changed your lifestyle, then you might feel that reducing your limit is a good idea. Reducing your limit can be a good idea if you don’t want the temptation of spending all your credit, or if you want to simplify your banking.
Problems with reducing your limit
Although reducing your limit can be a good idea, if you do it in the wrong way you can affect your rating. Your rating is partly calculated by looking at your available and current balances. If you reduce your limit, then the percentage of your total that is used will increase, and so might reduce your rating. If you can avoid the temptation, then keep some of your credit. However, if you think that reducing your is the best idea, then advise your card issuer
that you want your lowered.
Only spend what you can afford
If you are increasing your limit rather than reducing it, you need to remember to only increase the limit to what you can afford to pay. People with good history can often get hold of limits that they cannot possibly afford to pay back. Banks operate automated increases if you are a good customer, regardless of whether you can really afford it. If you are to increase your limit, make sure that you really can afford to make the repayments.
Have some spare
Generally, you should always make sure that you have some spare for emergency purposes. If you can avoid spending the extra credit, then having spare can be very useful and will also show that you are a responsible spender. If you can adjust your limits to suit your needs then you will make the most of your cards and not be controlled by debt.
Peter Kenny is a writer for The Thrifty Scot Please visit us at Secured Loans and RemortgagesVisit www.thriftyscot.co.uk/
