Credit Cards With High Spending Limits
- Consumers who use credit cards with high limits are less likely to exceed their limit. As a result, they will not be subject to over-the-limit fees that many credit card companies charge. In addition, a high spending limit indicates the consumer has more borrowing power, which can be attractive to retailers. Moreover, consumers with a high spending limit generally do not come close to the limit, and this gap between the credit card balance and credit card limit can improve their credit rating.
- A credit card with a high spending limit can be dangerous for some consumers. Consumers with a tendency to put every purchase on their credit card--without paying close attention to their credit limit--risk running up a high credit card balance. Other consumers might see this high limit as permission to spend more, because their credit card company allows it. Both of these scenarios can lead to credit card debt quickly.
- Obtaining a high credit card limit depends on the consumer's credit and financial situation. In short, consumers who have a history of paying their bills on time are likely to earn high credit limits. Moreover, if a consumer has a record of paying off her credit card bills every month, her credit card company is more likely to increase her limit. Consumers who want a higher limit can ask their credit card companies to increase their limit.
- Because there are advantages and disadvantages to high spending limits, consumers have to evaluate their financial situation when determining how much of a limit they need. Consumers who are regular and responsible credit card users can benefit from a higher limit, which reflects positively on their credit reports. However, those consumers who might take advantage of this limit will see their credit score decrease if they cannot pay off their higher balance monthly.