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Should I extend the credit line of the card?

The dream of many is to have a credit card with an extensive line of credit. This is somewhat logical, if you have a credit card, the ideal is to be able to acquire many things with it, the problem lies in can you really liquidate all those things?

For this reason, it is here that we guide you regarding the option of extending the credit line of the card or not.

money debt

When to extend the credit line of the card?

There are some circumstances when it is convenient to extend the credit line of your card, to know when it is convenient to do it and when not, we leave you with these analysis points:

• Do you need a higher credit limit?

It is exciting to see that you can spend more than what you are perceiving, but the fact that it is very exciting does not mean that it is appropriate. You should be aware that there is a greater probability of indebtedness and if you sign until you reach the top, what can happen is that you reach a point where you cannot pay the total monthly payment.

• Take care of your credit history .

That they offer you to increase your limit reflects that your credit expense is responsible, that for the bank you have turned out to be a good client and above all that according to your credit history, you have a good antecedent. Do not waste the opportunity if you do not need it!

If you later plan to apply for major credits such as:

  • Mortgage credit
  • Automotive credit

We suggest you reserve the right to accept the increase to your credit line.

credit card with money

• It is an opportunity to access other credits.

A wider limit on your credit card can give you the opportunity to access other credits, yes, this is totally true. But it is also real that if you use this line of credit, and you get on the sidelines, you fall behind in your payments or in the non-liquid way or do it with a take-off , you will stay away from these credits forever.

So our recommendation before requesting it is to determine your ability to pay . Ask yourself: If I were to use the entire line of credit offered to me, could I pay the monthly payments?

If the answer is No, you better forget to give the bank a positive answer and do not take unnecessary risks.

• It is not an emergency fund or an extension of your salary

This is a point that you should have, very clear. Having a major credit line does not imply that you can use it for an emergency or as an extension of your salary. This is a fallacy that often leads people to over-indebtedness.

Do you need an emergency fund? Resort to insurance

Do you need more income? We recommend you invest

Now, with everything we’ve told you … Do you think you’re ready to extend the credit line of the card?

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