Increase my credit line?

Question

Increase my credit line?
I only have 2 credit cards and one of them is capital one which has a $300 limit however now they sent me a letter stating I can increase my limit to $500.

Either way, I am only using less than 30% and I am paying it in full every month. So my question is which is better for my credit? Do I keep it at $300 or let them increase it?

Also what about if they keep increasing it, what should I do? I just want to do what is best for my credit. Thanks.

Answer 1

If you want to take are of your credit, don't let them increase the card unless you need them to.

Banks often offer people higher limits, because the more you spend, the more they make, and eventually you won't be able to pay it all back at the end of the month. If you're not using it, don't take it. It's a misconception that getting LOTS of credit means it's good for you-- it's not. What it means is that when you apply for a loan and you have (for example) 2 cards, each with a $2000 limit, that you have potentially spent $2000 that you now owe the bank BEFORE you pay for another loan. They don't calculate your serviceability on what you OWE, but on your maximum POTENTIAL to owe, for obvious reasons.

Leave it down unless you want to spend $500!

Answer 2

If you want to do what is best for your credit neither of these cards are very good be it 300 or 500 because Cap 1 does NOT report your credit limit to the Credit bureaus. Therefore you think you are helping by keeping it below 30% but in reality that looks like 100% as there is no credit limit posted to compare it to.

Answer 3

It does help your credit when they raise your credit limits.
When your limits go up, your overall utilization goes down. Which is good.
If you continue to take care of your credit obligations, like you currently are, and they keep increasing you limits, all the better.

As PJ said, Cap One doesn't report the credit limit, only the high balance. But that is supposed to change this fall due to a class action suit. If Cap One does what they are supposed to, they will soon be reporting the credit limit.

My personal opinion of Cap One is not very high, but if you are building/rebuilding credit they are a good starting point.

Answer 4

This sounds like a secured card, because banks don't normally leave the decision to raise your credit line up to you. Capital One is one of the less principled of the banks in the unprincipled banking racket--er, industry. When they say "No annual fee," you may "Discover" (another company that, while somewhat unprincipled, is far more trustworthy than Capital One) that "no annual fee" doesn't necessarily rule out the monthly fee they either didn't bother to mention or hid somewhere in the fine print.

Answer 5

i've got heard that one area of yoru credit status is your debt to credit ratio. So, in case you have $25,000 properly worth of credit, and you purely owe $2000, then you're a lot greater powerful off than in case you purely had $5000 properly worth of credit, yet you owed $4500. If what I heard is acceptable, then your credit will fairly get greater powerful in case you boost your credit line, yet do no longer use the greater suitable credit. And, attempt to pay down what you do owe.