You may think that having a credit limit sucks. Why would you want to have a limit on your generous weekend shopping spree? You will pay for all of it after all.
But having a credit limit has an upside. There are benefits when your credit card has a limit. Increasing your credit limit may lead to more savings and less hassle. Below are the top reasons why increasing your credit limit is a surefire way to level up you financial game.
Easier to get loans
High credit scores can help you get easier loan applications, whether it’s for your home or for your car. You’ll also have a better chance of getting a lower interest rate, since your credit score determines whether you’ll be offered the best available rate or a higher, risk-adjusted rate. So it’s totally a win-win situation!
More rewards
Having a higher credit limit can help you consistently pay off your balance on time and not depending your expenses on your credit card. The conventional wisdom says that you shouldn’t charge everyday expenses like groceries and gas to your credit card, but that advice only applies if you’re carrying a balance – it’s designed to help you avoid making a bad problem worse. To get more rewards, you have to add your expenses to your credit card. Apply for a Union Bank credit card today to enjoy promos and rewards that comes left and right.
In case of emergency
Having a credit limit comes helpful when you have a sudden emergency, like a sudden visit to the hospital and so on.
Large purchases are possible
Let’s say you want to buy a new TV for your beloved mother. That’s now possible with the help of increasing your credit limit. What you might not know is that your credit card likely includes a number of consumer protections that can come to your rescue if there is a problem with your purchase. So check if these protections are included in your credit card. Go check it now!
Increases your credit score
Having an increase in your credit limit hinders you from getting more unnecessary expenses. It will be a lot easier for you to increase your score since you have a minimum balance and you pay on time, since you only have a small amount of loan in your credit.
Lowers your use
Let’s admit it: having a credit card awakens our inner shopaholic. All of the sudden, it is now possible for us to buy anything that we want in a small amount of money. That’s really great and all but having no limit can be scary and can lead to your financial doom. Having a credit limit lets you know that your next big purchase can max out your card and can become totally bad for your financial status.
Better for younger people
If you are giving your child a credit card, make sure that it has a credit limit. It can help them minimize their spending and be responsible enough to save.