Credit card highest limit

credit card highest limit

There is no "golden rule" on how high of a credit limit an individual should have. There are 22 year olds that have $100,000 credit limits and 40 year olds that have $1000. The most important thing is to not over spend and pay your balance(s) in full every month. Seeing as you are doing that now, there is no downside to getting an increase.

As long as you're not trying to get a higher limit in order to actually spend more money, or might be tempted to do so, it's generally advantageous to have a higher limit if available. A large part of credit score is based on utilization rate (balance due at statement closing divided by credit limit). Basically, you want more than 0% and less than 30% or preferably less than 10% used. Doubling your credit limit halves your utilization rate. And it can be comforting to have it there "in case you need it" in some sort of emergency scenario.

  • Some credit cards do a "hard pull" of your credit report if you ask for a higher limit. This can lower your credit score slightly for a short time, though generally isn't a big deal unless you're requesting more credit all the time.
  • It's conceivable that for some larger credit application that isn't entirely score based and has more human oversight, like for a mortgage, if you have a lot of unused credit, you may be asked about it, and potentially even asked to have some credit limits lowered. Basically, if you could at any given moment suddenly get in debt for hundreds of thousands of dollars, that might look like a risk to the bank you're now trying to get a loan from. This isn't that likely to actually happen, especially if your credit history shows you generally being responsible, but it's not completely unheard of.
  • If you ever get in the mindset when you charge something on a credit card that "I'm not really spending the money now," you can be in a world of pain very quickly. This can be compounded if you have high limits, and don't realize how much you're spending. Credit cards are very useful tools, but money you spend on them is as much spent as if you paid for it with any other technique.

There's no "right" or "default" amount of credit that you "should have" at any given point in your life. If you're using credit responsibly, and don't need more credit, there's no particular reason to ask for more credit. If you work at it and are patient, it's easy to eventually have tens of thousands of dollars of unused credit limits, but that doesn't really get you anywhere you need to be by itself.

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