Banks are always aware of contacting their customers to offer an increase in their credit line. They do it by calling or online. They usually offer credit cards or an extra.
Although it is annoying, that the bank to look for to offer a new card or increase their credit, is a good sign. This means that you are making good use of your account and have a good credit history.
Increase my credit line yes or no?
If your bank offers you this type of offer it is because you know you are a good customer. The institution trusts that through a large loan or larger line, you will continue to have control of your finances.
Is it really nice?
As we said earlier is a good sign, but it is a double-edged sword. Having a larger line of credit also means spending more money. What can cause if you do not have a good control count on debts that get out of control?
Consider these questions before deciding to accept that line of credit.
How many credit cards is it convenient to have?
The idea is to have only two credit cards: one destined to purchases of greater value or emergencies and with a high credit, the second with a small limit and daily use.
It is easy to get carried away by advertising but it is advisable not to open and close accounts as this only shows instability. If you already have two cards, forget all the other proposals that can be made.
Do I have the ability to pay more?
Having a higher credit line is not synonymous with having a higher salary. However, you should be honest with yourself and know if you can really afford to pay a higher credit. Although it is enough to pay a percentage since the plan is that you do not get into debt.
Do I use the correct percentage?
To know if your debt is considered healthy, it must be below 30% of your monthly income. That is, your salary should only have 30% to pay debts if you use more is a bad signal.
As for your credit cards you should only use a 50% limit on your credit card. That is, you can increase your credit limit, as long as you continue to use only 50% of the line.
Check This Out: Recommendations on the use of your credit cards
Do collections increase?
Increasing a line of credit means that your minimum payments will also increase. This is a benefit for the financial institution because, with these increases, they raise more money.
Advantages of a Larger Line of Credit
Increasing your line of credit also brings some benefits.
Better credit history
One of the advantages of having a higher credit line is that financial institutions will give you more attention. If they have discipline, they may even lower their interest rates.
Even if your line of credit increases, keep the same discipline in your payments, and habits in the use of your card. This means: always pay on time, pay more than the minimum, and pay the total each month.