Many people prefer credit cards with a higher credit limit. Needless to say, if you have a high credit line, it would be much easier to lower your credit-to-debt ratio (if you have responsible spending habits). However, there is also the tendency to spend more and maximize the limit, which can lead to serious bad credit problems later on. Indeed, enjoying a high credit line can either be advantageous or dangerous, depending on how a credit cardholder manages it.
What Your Credit Line Says About You
Many people who enjoy high credit limit have a history of good credit. If you’re going to apply for a new credit card, the range of your limit would be largely determined by your credit history. Of course, if you have bad credit history or delinquent payments in your accounts, no creditor would be confident to extend you a high limit. In fact, those with poor credit rating would find it difficult to get approved for an unsecured credit card and may even be required to submit a security cash deposit before they can get a credit card.
Sometimes, you may start with an average borrowing limit but after some time, your issuer may voluntarily raise your limit based upon your payment record for the previous months. Then there are credit card companies that offer huge credit lines to attract new customers, as long as they have an good to excellent credit. Read more about How To Manage A High Credit Limit
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