Money Management

What can a higher credit limit do for you? 

Credit cards can be powerful tools to improve your financial profile. And when it comes to credit cards 101, credit limit is surely at the top of the list of the basics to understand. “Credit limit” refers to the maximum amount you can spend on any given credit card. It’s determined by the credit card’s issuer (and you may be given increases periodically without asking), but you can also request credit limit increases. You may or may not be approved, depending on your credit score, income, and card usage.

A higher credit limit can be beneficial

Having a higher credit limit can help you in a few ways. If your line of credit goes from $2,000 to $4,000, you’ll be able to charge more on that card. But you could also see a bump in your credit score thanks to having a lower credit utilization ratio. This refers to the difference between how much revolving credit (your credit limit) you have at your disposal versus how much you’re actually using at any given time. The general rule of thumb is that you should keep this number under 30%.

For example, if you have a credit card with a $4,000 limit, you should aim to keep your balance on it at any given time to less than $1,200 (30% of your credit limit). Ideally, you’re paying your balance off in full every month and not carrying it forward from month to month — otherwise, you’ll be paying expensive interest on the balance.

Here are a few scenarios when you might want to ask your card issuer to up your limit. Note that if you ask for an increase and are denied, you may have to wait three to six months before you can try again.

1. You’ve improved your credit score

While having a higher credit limit can improve your credit score, like we discussed above, if you already have a higher credit score than when you first got the card, you might want to ask for an increase. Maybe your credit score was languishing in the “fair” range, and you decided to focus on boosting your score. So you picked up a side hustle to make extra money to pay down some existing debt, and also focused on making all your payments on time. Now you’re sitting on a credit score in the “good” range. Your credit card issuer might be willing to bump up your limit in this scenario — which could also increase your score even more.

2. You’ve increased your income

Did you get a promotion or even change careers recently? If you’re making more money now than when you got your credit card, it could be a good time to ask for a credit limit increase. You’ll have to provide your annual income when you request the increase anyway. Your income matters to a credit card issuer because thanks to the 2009 CARD Act, it has to consider your ability to make required payments on the card. If your income can’t support the credit limit you’re requesting, you’ll likely be denied.

3. You want more buying power for a specific reason

Let’s say you’re getting ready to buy some new furniture and you want to use your favorite cash back credit card to earn some money back on the deal, but the credit limit isn’t high enough for you to make the purchase without maxing out the card. This could be a good time to ask for a credit limit increase. Similarly, if you’re planning a trip overseas, you might want a higher credit limit on your travel credit card, since it doesn’t charge foreign transaction fees and you intend to put your expenses on it while you’re out of the country.

If you’re looking for a fairly simple way to boost your credit score and boost your credit card buying power, consider asking for a credit limit increase on your card.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Image source: Getty Images
What happenedDairy Queen will celebrate the first signs of summer with new flavors and a special offer on its iconic Blizzards. In a nod to 1985, the year Blizzards were first sold, customers can score one for just $0.85 from April 10 to 23. According to USA Today, to get yours, all you need to do is download the Dairy Queen app.So whatApril’s Blizzard of the month is S’mores, a returning old favorite, but you’ll find a flurry of other summer menu items in stores too. For starters, Dairy Queen will launch two new summer flavors: Peanut Butter Puppy Chow and Oreo Brookie. It’s also bringing back its Cotton Candy and Choco-Dipped Strawberry Blizzards.The $0.85 deal is appealing — who wouldn’t want to get a nostalgia-laced ice cream treat for less than a dollar? But in terms of your finances, offers like these raise an interesting question. Is it worth downloading an app or sharing your personal data to save a couple of dollars?Now whatThere are some serious savings to be found on coupon and cash-back apps. In addition to individual offers like the $0.85 Blizzard, apps can be a good way to snag some great discounts. But they can also increase your risk of fraud, identity theft, and malware, so it’s worth treading carefully.If you’re a Dairy Queen regular, the app lets you access special offers like this one and also earn points and keep tabs on the latest new products. If that’s useful to you, great. But if you’re only interested in a one-time deal, you might be better off uninstalling the app after you’ve taken advantage of the offer.Here are some other ways to reduce the risks when installing apps or signing up for deals:Pay attention to what data the app collects: Some apps track your location, others might want to access your camera or contacts. Understand what the app will access, why it needs it, and how it will use your information. Use the settings on your phone to control what each app can do.Understand what the company will do with your data: There’s a reason companies get you to share your contact information or download an app to access offers. They want to build a profile of your habits. Check the user agreement to make sure you’re comfortable with how your data will be used and how it will be kept secure.Set up a separate email address to use for promotional offers: If an offer only wants your email address, don’t give them your personal one. That way there’s less chance the address you use to, say, log into your bank account, could be sold to unknown third parties.Only download apps from sources you trust: According to G DATA, a cybersecurity firm, last year attackers released two to three apps containing malware per minute. Be cautious about what you install, and consider using antivirus software.Alert: highest cash back card we’ve seen now has 0% intro APR until 2024If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee. In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes. Read our free reviewWe’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Emma Newbery has positions in ICON. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 

What happened

Dairy Queen will celebrate the first signs of summer with new flavors and a special offer on its iconic Blizzards. In a nod to 1985, the year Blizzards were first sold, customers can score one for just $0.85 from April 10 to 23. According to USA Today, to get yours, all you need to do is download the Dairy Queen app.

So what

April’s Blizzard of the month is S’mores, a returning old favorite, but you’ll find a flurry of other summer menu items in stores too. For starters, Dairy Queen will launch two new summer flavors: Peanut Butter Puppy Chow and Oreo Brookie. It’s also bringing back its Cotton Candy and Choco-Dipped Strawberry Blizzards.

The $0.85 deal is appealing — who wouldn’t want to get a nostalgia-laced ice cream treat for less than a dollar? But in terms of your finances, offers like these raise an interesting question. Is it worth downloading an app or sharing your personal data to save a couple of dollars?

Now what

There are some serious savings to be found on coupon and cash-back apps. In addition to individual offers like the $0.85 Blizzard, apps can be a good way to snag some great discounts. But they can also increase your risk of fraud, identity theft, and malware, so it’s worth treading carefully.

If you’re a Dairy Queen regular, the app lets you access special offers like this one and also earn points and keep tabs on the latest new products. If that’s useful to you, great. But if you’re only interested in a one-time deal, you might be better off uninstalling the app after you’ve taken advantage of the offer.

Here are some other ways to reduce the risks when installing apps or signing up for deals:

Pay attention to what data the app collects: Some apps track your location, others might want to access your camera or contacts. Understand what the app will access, why it needs it, and how it will use your information. Use the settings on your phone to control what each app can do.Understand what the company will do with your data: There’s a reason companies get you to share your contact information or download an app to access offers. They want to build a profile of your habits. Check the user agreement to make sure you’re comfortable with how your data will be used and how it will be kept secure.Set up a separate email address to use for promotional offers: If an offer only wants your email address, don’t give them your personal one. That way there’s less chance the address you use to, say, log into your bank account, could be sold to unknown third parties.Only download apps from sources you trust: According to G DATA, a cybersecurity firm, last year attackers released two to three apps containing malware per minute. Be cautious about what you install, and consider using antivirus software.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2024

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Emma Newbery has positions in ICON. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

 Read More