The desire for the largest possible credit line for a credit card is great for some: an inexhaustible credit line suggests freedom and flexibility and makes some dreams come true prematurely.
However, it is often forgotten that a very generous credit line can also pose a risk in at least two respects. In the following, we will, therefore, consider the question of which specific arguments speak for a credit line that is as generous as possible for a credit card and which against.
But let’s start at the very beginning: First, it should be clarified what a credit line is with a credit card and who decides on the amount of the credit line.
The desire for the largest possible credit line for a credit card is great for some: an inexhaustible credit line suggests freedom and flexibility and makes some dreams come true prematurely. However, it is often forgotten that a very generous credit line can also pose a risk in at least two respects.
In the following, we will, therefore, consider the question of which specific arguments speak for a credit line that is as generous as possible for a credit card and which against. But let’s start at the very beginning: First, it should be clarified what a credit line is with a credit card and who decides on the amount of the credit line.
Credit cards are not unlimited usable
It would hardly be economically viable that a credit institution would provide an unlimited amount of credit to a customer: what if the customer increased the credit to an almost infinite amount and could then never repay it? Credit institutions are usually not known for giving away money.
Therefore, they usually work with a credit line on credit cards. In this context, a credit line describes the amount up to which a customer may charge his credit card in a specific billing period. If the credit line is exhausted in a billing period and the customer wants to continue playing with his credit card in the same period, it can become embarrassing at the checkout:
The credit card will probably simply no longer work. It will only be functional again in the next billing period – provided the customer is not already in debt and can pay his credit card debt. If this is not the case, sooner or later the credit card may be canceled and other unpleasant measures taken in an emergency.
In order to avoid embarrassing situations at the cash register and to be able to plan better, everyone should, of course, know how high their credit line is on their credit card: Then they know how much they can charge the card and can make plans like that Credit card bill should be paid reliably.
However, the customer only has indirect options when it comes to the amount of the credit line: First and foremost, of course, the credit institution that entrusts the credit card to his customer determines the credit line. It probably refers above all to the customer’s creditworthiness. Of course, credit cardholders have the option of lowering the credit line on their own.
You can also start trying to have the credit line increased if necessary – but the bank will certainly only fulfill this request if it can defend this approach.
It can be assumed that she will do this in an appropriate manner if, for example, the credit line is already old and the customer’s income situation has improved in the meantime and/or if the customer has now proven its reliability for some time, Other reasons, on the basis of which the credit institution could agree to an increase in the credit line, are conceivable.
Arguments for the largest possible credit line
Especially people who may have used the same credit line for their credit card for a long time, but are now earning more money, could consider whether they should not have their credit line increase for their credit card. There are two main arguments for the plan to work towards the largest possible offer from the bank.
On the one hand, the largest possible credit line simply and simply offers the greatest flexibility – if, for example, you focus on the fulfillment of mere consumer wishes, the early fulfillment of larger wishes with a more generous credit line is within reach, which can be pleasant.
On the other hand, a credit line that is as generous as possible can also provide a certain amount of security: for example, if you can still use your credit card a lot at the end of a longer holiday despite the fact that you have already used the credit card freely, you are ideally still in the event of an accident or another emergency situation once fluid.
The extent to which the largest possible credit line can also go hand in hand with two significant uncertainties is explained below!
Arguments against the largest possible credit line
There are very important arguments that speak against securing the largest possible credit limit for your own credit card. Above all, it should not be forgotten that a high credit line is a certain temptation – at least if you are not very disciplined. Some people who are prevented from shopping by reaching the lower credit card limit may just go on with a more generous credit line until nothing really works.
Once the highest possible credit line has been exhausted and you have badly planned financially, the question quickly arises as to how the credit card debt should now be paid. In extreme cases and when there is no wealth, you may already be seriously in debt and have all kinds of problems on your neck.
But even if you can rule out dealing irresponsibly with the highest possible credit line, the question arises of what happens if someone else does it illegally to enrich yourself. In the worst case and if the card is not blocked, this wrongdoer might only be stopped when the very high credit line has been exhausted. In the worst case, a larger credit line also means the risk of a higher loss.
Conclusion: choose a credit line deliberately!
Even if the credit card holder does not have the last word in choosing the credit line, but the bank, he should make sure that the credit line fits his individual needs as well as possible. A very low credit line can be impractical and, if there really is a need for a higher credit limit, it is not really appropriate as long as your credit rating would give you more.
A credit line that turns out to be very low, for example, because it has never been adjusted to an improved income situation, can quickly become a real annoyance. In many cases, however, it does not have to be the maximum possible in terms of credit lines.
And certainly not to be given a credit line that seems too huge and that you really can’t use – just because the bank offers it. Anyone who does not want to be seduced by a credit line that is very generous in relation to income or needs or who wants to reduce the possible damage from credit card loss can ask their bank to lower the credit line for the credit card.
The conclusion can therefore only be: The credit line for the practical plastic card should match your own financial opportunities and needs, which can also change, and should therefore always be kept in view!