Having a current credit score that is in the 650s, I am definitely not a person with great credit. With that said, I am not a person with terrible credit either. You know, the 500s or low 600s. I am one of those people rebuilding my credit. Currently, I have eight credit cards, and I pay off my balances each and every month.
Credit card limit increases
Credit cards will sometimes give their card holders a credit limit increase. This is especially true if a card holder has shown a good payment history pattern with them. Many of my credit cards have given me random credit card increases, and that is always a good thing as it positively impacts my overall credit card utilization.
One of my credit cards offered me a credit limit increase for a fee
One of the credit cards that I have is an Aspire credit card. I cannot complain about this credit card, it has actually been a good card. When I applied for the card, they initially gave me a decent amount of credit. For me, a $2000 credit limit is great.
After having my Aspire credit card for a year and a half, Aspire sent me a letter and an email offering me a $200 credit limit increase. At first, I thought okay cool. But, while reading the fine print, I seen that there would be a charge of $29.95 for the credit limit increase. This didn’t sit well with me, and I passed on the offer. As much as getting more available credit is a good thing, it definitely isn’t worth paying for.
Why would a credit card charge you for a credit limit increase?
Some credit card companies will charge a credit limit increase fee because it is a way for them to make money. Credit card companies are a business out to make money. They know a lot of people will go for an offer like this. This is especially true for people that are trying to rebuild their credit.
I am not here to bash my Aspire credit card. Like I said, it has been a terrific credit card. The credit limit increase fee is just one of the many ways credit cards can make money. I mean, think about all of the credit cards that charge an annual fee. Unfortunately, for those of us with not so good credit, the annual fee seems to be very common.
Don’t pay a fee for a credit limit increase
This is especially true for a small limit increase. Using myself as an example, the $200 increase will not do much for my overall credit card utilization. With all my credit cards, I have $18,000 of total credit. Getting it to $18,200 will not impact my credit much.
If they offered me a $1000 credit limit increase, I still wouldn’t pay the credit limit increase fee, but I might be a little enticed. Why? Because increasing my overall credit to $19,000 will have a positive impact on my credit utilization and help my credit scores.
My advice to anybody that gets a credit card increase offer from any company that requires a fee is to pass it up. It is really not necessary. Instead, be patient as other credit cards will give you credit limit increases without any fee. Sure, we all want to increase our credit scores as quickly as possible, but on time payments and having a good credit card utilization under 30 percent is the only real healing process.
