Should you always accept credit card limit increases when offered?
How many times has the bank contacted you and increased your credit card limit? How many times have you rubbed your hands and thought about spending that extra money?
But should you always accept a limit rise on your cards and why do they actually offer this to you?
The banks only offer you increased limits if you use your card regularly and are likely to be a good source of interest income for them in the future. The temptation to spend more and more can be too much for some people and see them need to stay with the same bank or credit card company for their working lives in order to pay off their debts. Can you imagine the bank offering you an increase if you paid off your card each month?
The bottom line is that the banks are in business to make money not finance those who pay off their cards each month, as the profit from this type of customer is minimal. They want to hook the bigger spenders, the ones who cannot resist temptation and you could be next on their list.
So unless you feel that you can actually afford to finance your increased credit card limit do not always be tempted by this loose talk from the banks - something which is very much at the heart of the problem today.
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