Can the spending cap, granted by your credit card company, go up if you pay off everything on time?

[Skyros]

[MrOracle]

Let me explain how credit cards work for anyone who is interested:

The banks that issue these cards PREFER that you carry HUGE amounts of money on your cards, because the more you put on the card, the more interest money you'll have to pay. And credit card interest is among the highest there is. Even GREAT rates for credit card interests are highway robbery (12%), but there are people paying as high as 29%, which is beyond insane. You carrying a balance on your card - AS LONG AS YOU MAKE YOUR PAYMENTS ON-TIME - is what the company prefers. It's not what's best for YOU - but they don't care about you, they just care about profits.

And for that reason, after you've had the card for 6 months or more, you can call that bank and ask them to increase your credit limit. If you make at least the minimum payment on time every month, ON-TIME, they're almost certain to raise your limit. And if you actually use the card, and keep those payments on time, then you can call again after 3 more months, and they'll raise it again. And in three months, again. Or maybe they'll say - not this time, try again in a few months. And after a few more months, you call back, and that time, they'll say "okay, sure."

What matters more than almost anything with your credit is making payments NO LATER THAN the due date. If your next payment says "due 8/14/2022, late fee will be charged if payment received after 8/21/2022", that doesn't mean that paying on 8/16 is "on time" - that's a LATE payment. Just because they don't assess you a FEE doesn't mean it doesn't count against your credit score. "On time" means on or before 8/14. Payments 8/15 or later are LATE, and late payments hurt your credit score, and reduce the likelihood that they'll approve credit increases or anything else.

You might think "well, my minimum payment is $60, but I'm going to be paying $500 this month - but I won't have that money until 2 days after the due date. That won't matter when they see the big payment, though." Except it DOES matter. They don't care if you pay $60 or $500 - they DO care that your payment is on-time, or that it's late.

There can be good reasons for increasing your credit limit - as a business, I make bigger purchases from wholesalers that I turn around and sell to customers, so I need a bigger limit than most people do for their personal accounts, for example - and maybe you want a higher limit because you're planning a trip and you need to make sure you can safely pay for things while you're on the road. Just be careful, and remember that not only will you have to pay back every penny, but you're also going to pay a lot more in interest if you carry over a balance, and the higher your credit limit, the more interest you'll be paying. Interest is something you should avoid ever having to pay if you possibly can - but there are times when it is the best decision. Just be careful, and do NOT accrue interest for consumer spending - that new outfit or that big TV is not worth paying an extra $400 in interest payments on top of the base price.

[cloud9vortex1234]

You can ask them to increase your Credit Line. That doesn't mean you go more into debt. However, if you have a High Credit Score and have paid your bills on time consistently then there should be a place on your account to ask for a Credit Line increase or else ask them directly. The wider the spread between your Credit Line and how much you owe actually can increase your Credit Score. However, the main thing that increases it is never being late on a payment.

[CindyRuns]

If you regularly pay off everything and ask for a higher limit, you'll almost always get it.

Big secret... the credit card companies get a cut of every transaction, so they love people who use their cards a lot, as long as they also pay their bills.

[Skyros]

Thanks, I’m just going to have to try really hard to not let it go to my head with spending.

[KatherineJ]

That’s usually how it works. And usually what leads to trouble. Never spend more than you can pay back each month, and you’ll never have any issues with getting into the cycle of interest rate debt.

[14JDPO]

It can, but it will also depend a bit on your income as well. Keep your income information updated with them, and keep paying on time and they will likely give you an increase. :)

[Adam1978]

You shouldn't care because if you can actually pay the bills why use credit, your selling your life data for free. You are just risking that you put yourself in a situation you can't handle and your trapped, just as they want.

[slatyb]

It can over time as your credit rating improves. It’s still going be tied to your income. They won’t give an unsecured $50,000 credit line to someone making $50,000/year.

[Ευδεμονια]

No, mine can’t, since I agreed with bank for a max of 5000€. I never go up to that amount, eventually in that case I can use transfer.

[jennifer_bloom]

Yeah, I never spend more than $2000 a month and my limit is around $25,000. It’s because I’ve had a credit card for over 16 years.

[Slartybartfast]

Yes and it can be a problem. I have one card that they keep upping the limit and I really don't need a card I can buy a Tesla with.

[Bratsondanielle]

I'm fairly sure that you have to actively request the credit limit to be raised

[Guy13]

Rarely, unless other credit history is in good standing.

[Redstang88]

Yeah if you’re good with it they’ll usually offer increases without you needing to ask

[EnglishEuropean]

Yes, they will offer you a higher limit when it suits them. You don't have to accept it.

[Dinklex3]

Definitely!

[Exterminatore]

Yes.