Comments on: Chase Says Credit Limit Increase Is An Opportunity!

By: Mike

Mike — Mon, 19 Dec 2011 20:55:03 +0000

I understand eveything that everyone is saying and I mean there’s nothing wrong with increasing your FICO score, getting rewards points, and other things that others have and will mention and I guess its because I write contracts for a living. But, when you get a credit card you’ve entered into an agreement (a contract). Usually when there are any funding increases in a contract its a bilateral agreement between you and the other contractor (your company and another company). This is definately a standard practice for banks to increase credit limits but just because its a “standard practice” doesn’t make it ok. If you want an “automatic inrease” then a bank should send you a letter stating, “would you like an automatic increase, if so, respond…etc, etc.” A bank (any company) can’t just say, we are unilaterally changing the terms of your contract on your behalf to benefit you. Logic like that makes for a very poorly written “bilateral contract” and as credit cards are, in a way, bilateral contracts (agreements between you and a bank) they should treat them as such. I just wanted to share my point of view from a contracting perspective.

By: Neo

Neo — Fri, 16 Jul 2010 18:10:33 +0000

I dont understand why people are so furious with chase increasing your credit limit. Just because the bank has increased your credit limit doesnt mean that you have to use all of it. You are the one, not the bank who is responsible for your debt. If you think you cant control yourself when you have a higher purchase limit, there is an alternate way. Request Chase for an Add-on card for your account and set the limit for that add on card as whatever limit you want. You will stil have the overall account credit limit but you wil not be able to spend more than what you have set for your add-on card. And the limit on add-on card will not increase automatically.

Keeping the higher credit limit can help in in a number of ways. Just in case you want to make a big purchase, ( when you have enough cash in your bank account) , use the card to make the purchase. You will earn the rewards points or cash back depending on your card. Also you get an interest free long for around a month ( until chase send you the bill with a due date usually 20-25 days from the bill date. ) If you plan your purchase carefully and make the purchase on the next day after your billing date, you will get this increased to closer to 2 months of interest free loan. And keep the money in your savings bank account and earn money for that. Pay the card bill using automatic payment from your Savings account and you don’t have to worry about paying interest of being in debt.

Additionally having a higher credit limit means a positive effect on your credit score. A higher credit limit will increase the credit score provided you keep the utilization low. This will in turn get you more savings by being easier to qualify for lower or other 0% interest schemes for loans ( especially car loans).

By: ConnieBrooks

ConnieBrooks — Wed, 02 Jul 2008 23:46:39 +0000

B is exactly right on the FICO score ratio. People with credit scores over 750 usually charge no more than 7% of their available credit.

Available credit vs. used credit is 30% of your credit score.

By: b

Wed, 02 Jul 2008 23:41:45 +0000

There are some hidden advantages to increased credit lines on credit cards.

1. Your FICO score is partly based on your percentage of used credit on revolving credit accounts. 0-9% is the value that will keep your score the highest. Therefore if you turned down a $13,000 limit in favor of $4000 and have only $361 dollars in credit card debt you have a lower credit score because your are above 9%. When they pull your credit report they look at your current balance and not whether you pay your balance in full each month. Having a credit line will give you some breathing room to keep you below that 9% value. This is extremely important for me as I travel for work frequently and have to put hotel stays and flights on my card while I wait for reimbursement which comes before my credit card bill is due each cycle. I can keep my score high and still access the amount of credit needed to travel for work.

2. If you have a rewards card, having a high credit line can really allow you to build up your rewards quickly. One example is when I plan to purchase my next car I plan to purchase it for cash. I will put the car on my credit card to earn the miles which will equal a full flight then pay off the value of the car the next day by check to the credit card company and not pay additional interest. In effect I will have
earned a free flight by utilizing that credit for a total of one day at no cost to myself.

The key is using your credit intelligently and know the limits of what you can afford. If you do not have the will power to control your spending turning down your increases is a smart thing to do, however; if you are responsible you should take your increases and think about how to maximize your financial situation using that value. Having a larger line of credit is a tool you can use to your advantage.

By: Greg

Greg — Sun, 22 Jun 2008 04:18:15 +0000

There are several issues with this article.

First of all, Chase is offering you a higher credit limit. That doesn’t mean you have to use it. If you cannot control yourself to not max out your credit line, that is not their fault. You obviously have an issue with spending.

Second, if you don’t want the extra credit line, you can simply call them and ask to have it reduced and ask for them to no longer offer automatic credit line increases.

Third, all banks do this. This is a typical practice of banks. If they see you are paying your bills on time, they extend you more credit.

In conclusion, if you can’t control your spending, don’t blame it on a bank giving you a credit line increase. Blame it on your own faults

By: A

Sun, 24 Feb 2008 17:08:40 +0000

Listen to Steve. These automatic credit increases are great for your FICO score. Your FICO score takes a dive when you have a balance on your card that is greater than 50% of your credit limit. So, let the increases come in and just be disciplined enough to not use it. When the day comes that you need to buy a house or car, you’ll be happy for it.

By: Steve

Steve — Wed, 18 Jul 2007 20:04:37 +0000

Automatic credit increases are great. First, there is a soft pull on your credit report, which does not affect your score.

Second, an increased limit means that your credit score will increase given that you have equal utilization. If you do not have the self control to spend within your means, there is no way you should have a credit card in the first place.

Automatic credit increases are actually a smart way to build your credit score and reduce interest rates on large mortgage loans.

By: Ryan

Ryan — Mon, 25 Jun 2007 21:22:39 +0000

Baz, it is a good thing for that reason. The problem is that a lot of people don’t quite have the willpower needed to have a large credit line and not use it. My guess is people like you and me do, and love high limits that will never be touched. I commend those who know having a limit isn’t for them though.

By: Baz L

Baz L — Sun, 24 Jun 2007 06:50:24 +0000

OK, I don’t get it. Why is a higher limit a bad thing? From all what I’ve read, it’s going to increase your credit score because your balance would then be a lower percentage of your “available credit”.

Now if we’re talking about decreasing the limit to curb your own temptation for using it, that I understand.

By: Chairman Steve

Chairman Steve — Tue, 19 Jun 2007 13:46:07 +0000

Wow … that’s just irresponsible.

Do they really think it could possibly be healthy for someone to run up over $10K on a credit card?

My heart goes out to people when I hear they have $10K of cc debt … these companies are practically begging people to do it.

I guess if you made six figures several times over, then having that much on a card wouldn’t cost you a fortune.