If monthly charges stay about the same you are using a smaller percentage available to you
Keep your spending to less than 30% of total available to you
Ask for an increase when things are financially good-just in case for a rainy day need
This article on Investopedia points how increasing your credit limit on existing credit cards is better for your FICO score than getting another credit card. They use the example of:
“When you increase your amount of total available credit, it lowers your credit utilization rate. This is also known as your credit utilization ratio. This is one of the factors FICO takes into account when determining your credit score, and having a high credit utilization rate can have a negative impact. For example, let’s assume that you started with a credit limit of $1,000 and regularly have $800 charged onto the card; that means your credit utilization is at 80%. Now let’s assume you asked for a credit limit increase and now have a maximum of $5,000. If you are still charging $800 each month, your new credit utilization is now 16%.”
I also think it is a good strategy to build up your credit limit and use it sparingly but if you ever need it for an emergency it’s too late to get an increase at that time. Credit card companies like to give credit to those who don’t need it. So when you are in good financial shape consider expanding your credit limits, you just don’t know what’s around the corner and you may need some dry powder.
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