Purchasing Power

• A high credit limit enables you to charge expensive items and break down repayment on your own terms, as long as you send at least the minimum monthly amount designated by your bank. This ability is a pro in certain circumstances, such as needing car repairs, new furniture or appliances or dental care that you cannot pay for outright. The high limit becomes a con if you cannot control your spending habits and you overspend. You pay a high price even if you make your minimum payment every month because interest can add up to thousands of dollars over time. Your statement must show how long it will take, and how much you will pay in total by only paying the minimum.
  
  

Debt to Credit Limit Ratio

• Part of your credit score comes from a comparison of your total credit limits and the available amounts. Lenders dislike extending more credit to consumers with little available credit. You can get a decent credit score by using no more than 30 percent of your credit limits, but keeping your use at 10 percent is better. High credit limits let you spend more money while maintaining a good ratio for your score. For example, you should only maintain a balance of $1,000 to $3,000 with a $10,000 credit limit, but that amount jumps to $3,000 to $9,000 with a $30,000 limit.
  
  

Over Limit Fees

• Most banks impose fees on customers who exceed their credit limits, although the Board of Governors of the Federal Reserve System explains that you cannot spend more than your credit line unless you give your card issuer specific permission to let you do so. A high limit prevents you from exceeding your available credit and incurring a fee.
  
  

Considerations

• Your bank may raise your credit limit on your request if you believe the pros of more spending power outweigh the cons for your personal situation. Call the customer service department, emphasize your positive history with the bank and request a higher credit line. Such requests are considered on an individual basis, so your increase is not guaranteed. You have a good chance if you handle your account responsibly, and some banks give automatic increases to their best customers.