Sharing Daily Discoveries About Personal Finance And Business Topics

Credit Card Limit Was Significantly Increased Automatically

Today while looking at my credit card account I noticed that my credit limit for my personal Mastercard was automatically increased. While I would normally see it increase by a conservative amount from time to time, for some reason it jumped drastically by $2500 which makes my limit for this card $8200 and I can’t think of anything that I did to initiate that.

The only other time I saw this particular card increase a lot at once was back at around the Christmas shopping time in 2005 where in one day I bought over $3000 worth of gifts. A couple of days later I figured that I might as well just pay off the balance early so that I didn’t have to deal with it during the New Years time. To my surprise, upon checking my balance I noticed that my credit limit for the card had been increased by another $1800. At first I didn’t know why, but when you think about it I guess it made sense in that case as it was still early in the Christmas shopping time and I guess with me purchasing that much the card issuer was anticipating that I would spend even more and so they gave me more credit to spend.

A more devious explanation that some people have told me was how certain credit card issuers want to give certain people a higher credit limit in hopes that they don’t pay them off immediately and therefore the company can make a lot of money off the interest rates. Fortunately, I am the complete opposite of that and it makes you wonder if that is true where the intent is to try and get people like myself to overspend and mismanagement our bill payments as a lot of young adults around my age do tend to use a credit card as a way to borrow money and can’t fully pay it off every month.

I guess in my case the higher credit limit is a plus as it won’t affect my habit in regards to the way I use a credit card and having more flexibility is good.




3 Comments to Credit Card Limit Was Significantly Increased Automatically

  • I’m not to sure but I believe this practice is or should be against the consumer credit code or banking code of practice. how can banks just increase people credit with out at least your permission. I think it is intentially and the banks just hope that people will keep on spending. hopefully some one will complain and stop banks from being socially irresponsible

    allison 3/4/2007 3:48 am
  • i had the same exact thing happen to me. i always pay my credit card balance in full, my balance is always $500+ each month, and just recently, my limit went from $4500 to $7500. i agree with you, though, on the flexibility factor. even though they increased my limit, it doesn’t mean that i’ll be overspending to the point where i won’t be able to pay it off in full each month. along with the flexibility, it makes me the envy of all my other friends who are stuck at a credit limit of $800.

    jojo 3/11/2007 8:06 am
  • NEED A CREDIT CARD

    DAVID PARISH 8/17/2007 7:59 pm

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