Increase in Credit Limit

[abowers]

Another change I noticed on a recent credit card statement.. "For being a valued customer" my credit limit was increased from $600 to $1000. Clearly they want me to actually rack up $1000 in clothing at Old Navy, which I have no intention of doing, but is this a good thing since it improved my debt:credit line ratio? Or is it bad because I have more "revolving credit" available to me?

[Haku]

No no, I say that's a good thing. Good in terms of your credit to debt ratio.

It's only bad when someone looks at that and goes, "Ooooh, MORE free money!" and buys that matching Old Navy pants to go with the sweater.

But you're not like that, so that makes you a winner!

[bama20]

If I call and request a credit increase on my credit cards, does this hurt your credit score? I know if my ratio of available credit to amount due is a good ratio, that it will help my score. I just don't want to ding my credit by asking for an increase. Thanks.

[Bookie]

Bask in the warm fuzzies of corporate approval all you want; just don't reach for the plastic.

Credit increases are sucker bait. You handle your account responsibly, so you get "rewarded" by the opportunity to spend even more money you don't have on things you don't need to impress people you don't much like. (Or so I once saw it described.)

[bama20]

I have no credit card problems to date. We put everything we can on the card, and pay it off each month. We try and get as many points for the cashback rewards programs that we have on them. We have cashed in quiet well the past couple of years. Thanks for the message.

[bama20]

thread does not work.

[cbmeeks]

I think I go against the grain here by saying that credit is always a bad thing. Well, maybe not for a house but credit for clothes??? Come on. I would cut that card up into 10,000 pieces and melt it on my grill.

I just don't see how CC's ever really help you. And please, don't say house/insurance because you can get both with great rates if you pay in cash.

[parafly]

Originally Posted by cbmeeks

I just don't see how CC's ever really help you. And please, don't say house/insurance because you can get both with great rates if you pay in cash.

Cash Back and/or Rewards programs. Free money is free money!

Also, they improve your FICO score. The vast majority of people cannot afford to pay for house/insurance in cash.

[Fern]

If you plan to possibly purchase a house anytime down the road, keep in mind the following: When the bank reviews your mortgage application, they will count as debt your maximum line of credit on every credit card you have, REGARDLESS of whether you have maxed out the card or not. They do so because you have the potential at any time to run up big bills up to your limit, so, being the conservative institituiotns they are, they count it all as debt.

I have told my credit card companies in the past to put an indefinite hold on any automatic credit increases unless i tell them to do so.

[jmjj215]

Originally Posted by cbmeeks

I think I go against the grain here by saying that credit is always a bad thing. Well, maybe not for a house but credit for clothes??? Come on. I would cut that card up into 10,000 pieces and melt it on my grill.

Wouldn't the burgers then taste more like grilled snake?

[bama20]

jesse, i sent you a couple of private messages. could you check and respond please? thanks.

[jmjj215]

Originally Posted by parafly

Cash Back and/or Rewards programs. Free money is free money!

Also, they improve your FICO score. The vast majority of people cannot afford to pay for house/insurance in cash.

OH dear, let's not derail this thread into the other thread that is now a speeding locomotive...

[bama20]

already happened!

[Ima saver]

I like the free money that I get from the 1% cash back. Right now, I have more than $500 coming back to me in august!!

[bama20]

i have cashed in twice on the $500 cash back with mbna, and i just sent for another $250 cashback with them. now, i am working on my chase rewards credit card for cashback. they only give me a $300 limit for the year though. i like the cash back system alot. i try to put all my expenses on the credit card to get those cash back dollars.

[Ima saver]

My husband uses his american express for his purchases at Home Depot. He has spent over $50,000 there this year so far. I am getting a card with cash back for my purchases too. It is a way to make money!!

[wwjdmsl]

Gotta agree with cbmeeks....cut it up, blend it, melt it, whatever it takes.....just get rid of it ! Happy destruction !

[flash]

Originally Posted by Fern

If you plan to possibly purchase a house anytime down the road, keep in mind the following: When the bank reviews your mortgage application, they will count as debt your maximum line of credit on every credit card you have, REGARDLESS of whether you have maxed out the card or not. They do so because you have the potential at any time to run up big bills up to your limit, so, being the conservative institituiotns they are, they count it all as debt.

I have told my credit card companies in the past to put an indefinite hold on any automatic credit increases unless i tell them to do so.

Fern is exactly right here. That fact that you qualify for more credit is great, but the fact that you have it can and will be held against you.

[Ima saver]

I don't have that problem in that I will always pay cash for every house I build from now on, plus I know a good builder who works for free!! So keep those checks coming!!

[abowers]

My total credit card(s) limit isn't more than ~$5,000. So when I am at a point in my life where I am ready to buy a house, that won't be a huge percentage of my income.