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141 votes

Asking bank to reduce APR instead of increasing credit limit

The offer of an increased credit limit may be a sign of increased confidence. However from a bank's point of view it is an attempt to get you to spend more and thus make more money from you. ...
DJClayworth's user avatar
  • 33.4k
102 votes
Accepted

Is there a "catch" on my "increased credit limit"?

After this happened the second time, I wonder if there could be a "catch" on this. No I mean, what is my bank's real motivation for allowing me to spend more money. Credit card companies make ...
Peter Green's user avatar
  • 2,944
25 votes

Is there a "catch" on my "increased credit limit"?

There are two very small catches. You have just increased your available credit. In some cases when you want to make a loan, they will check your available credit against your creditworthiness (your ...
Yakk's user avatar
  • 3,233
20 votes

Is there a "catch" on my "increased credit limit"?

There is one massive catch in this which I found out when I went to Nationwide to ask for a loan. I've got a credit card which they kept increasing my credit limit, it's now at something ridiculous - ...
TheKLF99's user avatar
  • 311
19 votes

Is there a "catch" on my "increased credit limit"?

There is only a catch if you swallow the hook. The hook is that the bank hopes you will use the increased credit limit to buy more stuff, and not pay what you owe before the interest-free period ...
jamesqf's user avatar
  • 11.1k
17 votes
Accepted

How to manage multiple credit accounts balances?

I don't think your problem is payment timing - it's credit utilization. You are using a relatively high percentage of your credit limit each month (despite the fact that you pay it off on time). ...
D Stanley's user avatar
  • 135k
17 votes

Available credit more than credit line

The most important number on your credit card statement is not your available credit. The number you should be focusing on is your account balance. Before the refund, you had a balance of $0. That ...
Ben Miller's user avatar
  • 116k
16 votes
Accepted

Available credit more than credit line

You are correct. If you paid your bill and then received a refund, now the credit card (bank) owes you $400. You can spend $400 without owing anything. Or, if you do nothing and don't use the card ...
TTT's user avatar
  • 47.2k
15 votes

Asking bank to reduce APR instead of increasing credit limit

You are misunderstanding utilization. You do not need to carry a balance past the due date to create utilization, in general carrying a balance past the due date is not a good idea. The best practice ...
user3067860's user avatar
12 votes
Accepted

Asking bank to reduce APR instead of increasing credit limit

I've written a number of answers to this effect but my philosophy is just call and ask. Always be nice, but just ask. The worst possible outcome is no change. You can rationalize your way to any ...
quid's user avatar
  • 49k
11 votes

Negatives to increased credit card spending limit?

The only drawback is if you spend more than you can with the new limit and end up having to pay interest if you can't pay the balance in full. Other than that, there are no drawbacks to getting a ...
Michael's user avatar
  • 10.2k
8 votes

Is there a "catch" on my "increased credit limit"?

There is no catch. You've been a good customer and your bank wants to reward you for it. One of the ways you build credit is by having more credit available. So by increasing your credit limit, its ...
Michael's user avatar
  • 10.2k
6 votes
Accepted

Why do credit cards have minimum limits?

I believe it's just to limit the less well-off from acquiring one. If your credit history and income do not support a $15,000 credit limit, then don't even think about applying for an Altitude Black ...
Peter K.'s user avatar
  • 3,943
6 votes

Negatives to increased credit card spending limit?

There is another drawback, and this is why I keep a low-limit card for online purchases and another for carrying in risky/unfamiliar situations (e.g. travelling) a small limit acts as as damage ...
Chris H's user avatar
  • 2,555
6 votes

How to manage multiple credit accounts balances?

In addition to the existing answer, consider - If, and only if, you have a reason to want to game the score, i.e. maintain the higher level FICO, while still using the cards often, use this strategy. ...
JTP - Apologise to Monica's user avatar
5 votes
Accepted

My bank wants to lower my credit limit on my credit card. Will this impact me negatively?

No, it will have no negative impact on getting a mortgage. You are building up a history with regular payments and are not carrying a balance on the card each month. Your ability to get a mortgage ...
Mark Perryman's user avatar
4 votes

Any credit cards that won't let you go over your limit?

The credit card system is old and highly distributed. Not all card terminals are on-line. Not all card terminals are even electronic. So it is virtually impossible for them to precisely enforce a ...
Peter Green's user avatar
  • 2,944
4 votes
Accepted

Credit limit and regular payments

From my experience, banks report your credit usage only once a month, and they report the total on your bill. Whatever else you do during the month does not matter. I checked this by looking (monthly)...
Aganju's user avatar
  • 37.7k
4 votes

My bank wants to lower my credit limit on my credit card. Will this impact me negatively?

Will having a lower credit limit, which I will still never reach, negatively impact my ability to get a mortgage in future? This would increase your utilization, the percentage of your total ...
Brythan's user avatar
  • 21k
3 votes
Accepted

Is a large credit limit on a credit card dangerous if credit card details are hacked and leaked?

The credit limit is not going to be the problem; the daily spending limit is more likely be tripped first. I'm not a lawyer but if you are not responsible for the credit card details being leaked it ...
serakfalcon's user avatar
  • 1,354
3 votes

Credit limit and regular payments

You can find many other questions on this site about timing your payments vis-a-vis your credit score (e.g., here, here, and here). Basically, your credit usage is reported at a particular time ...
BrenBarn's user avatar
  • 24k
3 votes

Can I pay off my credit card balance to free up available credit?

Banks only send your balance to credit bureaus once a month; usually a few days after your statement date. Thus, as long as your usage is below 10% in that date range, you're ok. Regarding paying it ...
RonJohn's user avatar
  • 50.7k
3 votes

Are there any advantages to a credit limit increase as opposed to a new card?

There are lots of reasons to choose a credit card: effect on your score would not be the top one for me. I would use, in order: having at least two cards so if one is compromised and you're waiting ...
Kate Gregory's user avatar
  • 13.2k
3 votes

Asking bank to reduce APR instead of increasing credit limit

In addition to DJClayworth's answer there are very few (truly) 0% finance offers. Most have a fee of around 5%. In the case of a 12 month 0% finance offer that is paid off prior to the period ...
Pete B.'s user avatar
  • 76.5k
3 votes

Asking bank to reduce APR instead of increasing credit limit

Banks compete on APR, less so on credit limits. That is, a bank might be willing to give you a lower APR to keep you from going to another bank, but it's less likely they'll give you a higher credit ...
Acccumulation's user avatar
2 votes

Is there a "catch" on my "increased credit limit"?

One of the things that you have to be aware of is a little gotcha in the credit utilization rate. They, or at least the credit company I worked for, used the "high balance" in figuring the credit ...
Jonathan's user avatar
2 votes

Available credit more than credit line

I'm sure it depends on the company, but I routinely run balances greater than 0 on my credit card. The reason is simple: I already budgeted to spend the money, I know I'm going to spend the money, ...
The guy's user avatar
  • 21
2 votes

Asking bank to reduce APR instead of increasing credit limit

A point that hasn't been made yet is that "0% on new purchases" offers are a customer acquisition strategy. In my experience (US), they're not used for customer retention. More common for retention ...
thehole's user avatar
  • 287
2 votes

Asking bank to reduce APR instead of increasing credit limit

Sure, you can ASK. Frankly I doubt they'll say yes, but what does it cost you to ask? A little bit of your time, maybe a few cents on your phone bill if you have a pay-by-the-minute plan. :-)
Jay's user avatar
  • 22.7k

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