Credit Information and Personal Finance Resources | Credit One Bank

Credit One CentralTM

Explore ways to manage your credit and finances with Credit One Central. These informational articles and resources can help guide you in your everyday life.

5 Reasons to Accept a Credit Line Increase

5 Reasons to Accept a Credit Line Increase

Thinking about accepting a credit line increase (CLI) from your credit card company, but you’re not convinced it’s a good idea? Have you received an email from them stating that you’re pre-approved for a CLI, but something’s keeping you from clicking the “accept” button?

You’re not alone. There’s a lot of confusion about credit line increases and whether or not they’re actually a “good” thing. Well, “good” is a relative term, but there are definite advantages to an increased credit limit.

Here are five reasons you should consider saying “yes” to your next CLI offer:

1. More Purchasing Power

If you have more credit at your disposal, you can obviously purchase more products and services. This is especially convenient for bigger-ticket items, or for times of the year—like the holidays—when you purchase more items than usual.

It’s comforting to know you possess a credit limit high enough that your purchase(s) won’t be declined—assuming your account is in good standing and you have enough utility left on your credit card.

Whether or not you actually take advantage of this increased purchasing power is, of course, completely up to you. But, if you accept a CLI, it’s there for you if you need it.

2. It Could Raise Your Credit Score

How a credit line increase will affect your credit score is dependent on how you use it, but it all comes down to basic math. That’s because both of the main credit scoring models—FICO® Score and VantageScore®—heavily weigh a mathematical equation known as your credit utilization ratio (CUR) in calculating your credit score.

CUR = Sum of Your Outstanding Revolving Credit Balances ÷ Sum of Your Revolving Credit Limits

Most experts recommend you keep this ratio below 30%. Basic math dictates that, the larger the number you divide another number by, the smaller the quotient—in this case, your CUR—will be.

For example, if you have a $200 outstanding balance on a credit card with a $500 limit, the CUR on that card is 200 divided by 500, which equals .4 or 40%.

But if that outstanding balance stays the same and the card’s credit limit is increased to $700, its CUR is now .286 or 28.6%, below the recommended 30% maximum.

The key to lowering your CUR—and hopefully raising your credit score—with a credit line increase is to not increase your outstanding balance commensurately. So long as your outstanding balance stays the same or decreases, a CLI is contributing to lowering your credit utilization ratio.

3. You Could Earn More Rewards

If the credit card for which you receive a CLI is a rewards card, then a higher limit means the potential to earn more rewards. As long as you pay off your outstanding balance each month, increasing your credit line can be a good way to earn extra rewards.

But, if you end up paying high interest rates on large outstanding balances just to earn rewards, it could be a losing proposition. Larger balances, as pointed out in #2, can also contribute toward raising your CUR, which can lower your credit score.

4. It May Make It Easier to Get Additional Credit

Being offered a higher credit line means you’ve demonstrated a pattern of responsible credit behavior, and a credit card company is willing to extend you more credit. Continuing to demonstrate this responsible behavior—as well as lowering your CUR—will be reflected in your credit report and credit score, which other lenders will look at when deciding whether or not to extend you credit.

If you use your CLI responsibly—as in keeping your credit utilization ratio low and continuing to make regular on-time payments—a credit line increase should make you more attractive to other potential lenders.

5. It’s Nice for Emergencies

Knowing you’ve got additional credit to tap into in case of an emergency provides peace of mind and can save you a lot of hassle and heartache. That credit line increase could mean the difference between getting an emergency tow on the side of the road or having to call a friend or family member for a loan—and a ride! Or it could enable you to book an emergency flight home or purchase desperately needed medication for which you don’t have enough cash on hand.

Again, it’s completely up to you whether or not you use that credit you’ve been granted, but if there’s an emergency situation, it’s always better to have it at your disposal than not to have the option.

Only you can decide whether a credit line increase is right for you. If you’re fearful a CLI will cause you to charge more and carry a larger outstanding balance, then it may not be right for you. But if you treat it responsibly—and the very fact that you’ve been offered one means you’ve demonstrated responsible credit behavior—there are definite advantages.

Whether you decide to accept one or not, there’s no reason to fear a credit line increase. If you’re not ready to accept one today, consider one down the road. So long as you keep exercising good credit practices, a CLI should remain an option.


 

« Return
This material is for informational purposes only and is not intended to replace the advice of a qualified tax advisor, attorney or financial advisor. Readers should consult with their own tax advisor, attorney or financial advisor with regard to their personal situations.
Credit One Bank Testimonials

Customer Testimonials & Success Stories

Looking to reach your financial goals? See how Credit One Bank helps people purchase a house or car, handle emergencies and build their credit.

Read More

See If You Pre-Qualify Today

With a Credit One Bank Platinum Visa®, you'll earn 1% cash back on eligible purchases, terms apply, and receive many benefits like free online access to your credit score and $0 Fraud Liability.

In less than 60 seconds, find the card that's right for you!



Credit One Bank Credit Card

 Terms of Use 

Credit One Bank maintains our various websites (hereinafter referred to as "website") as a service to our customers and visitors in order to provide information about products and services and to facilitate communication with us. We require that all customers and visitors to our website adhere to these Terms of Use. By accessing our website and any of its pages, you indicate your acknowledgement and acceptance of the Terms of Use set forth herein without limitation or qualification. We may revise the Terms of Use at any time by updating this posting. You should therefore visit this posting to review the Terms of Use from time-to-time as you visit the website. For the purposes of these Terms of Use, references to Credit One Bank include its affiliates, directors and employees.

COPYRIGHT - The information and materials contained in the website, including but not limited to text and images herein (excluding certain images licensed from third parties) and their arrangement are © Copyright 2015 by Credit One Bank. The information and materials contained in the website may not be copied, displayed, distributed, licensed, modified, published, sold, used to create derivative work or otherwise used for public or commercial purposes without the express written permission of Credit One Bank.

LIMITATION OF LIABILITY - We use our best efforts to include accurate and up-to-date information and materials on the website, however, information and materials on the website are provided "as is" without any warranty of any kind, either express or implied, including but not limited to the implied warranties of merchantability, fitness for a particular purpose and non-infringement. Furthermore, we make no representations as to the accuracy or completeness of the information. The information and materials on the website may include technical inaccuracies or typographical errors. From time-to-time we may amend, change, add, delete, update or alter the information and/or materials contained in the website, including information regarding the products and services described or offered on the website, without notice. We assume no liability for any errors or omissions in the information or materials contained within the website and expressly disclaim any responsibility to update the information or materials contained within the website. By using the website, you acknowledge that we specifically disclaim any liability for any direct, indirect, special, unsolicited or consequential damages, losses or expenses arising out of your access to or use of the website, even if we have been advised of the possibility of such damages, including liability associated with any viruses or software which may impact a user's equipment.

GOVERNING LAW - You agree that your use of the website shall be governed by all applicable Federal laws and the law of the state of Nevada.

INFORMATION SUBMISSIONS - All information and materials (including but not limited to feedback data, documents, questions, comments, and suggestions) you submit to us via the website or email shall be deemed to be the property of Credit One Bank and may be used by us in a manner consistent with our Privacy Policy. We shall be free to reproduce, use, disclose, exhibit, display, transform, create derivative works and distribute this information and materials to others without limitation. Furthermore, we shall be free to use any ideas, concepts, know-how or techniques contained in such information or materials for any purpose whatsoever, including but not limited to developing, manufacturing and marketing purposes. Application information submitted to us shall be treated confidentially to the extent required by applicable law or as disclosed in the application and/or supporting materials.

ADVERTISING DISCLOSURE AND LINKS TO OTHER WEBSITES - We do not provide, endorse, nor guarantee any third-party product, service, information, or recommendation available through links from this website. The third parties providing products and services available through this website are not affiliated with us and are solely responsible for their products, services, information, recommendations, and all other content on their websites. We shall not be held liable for any third party's failure with regard to such advertised products, services, and benefits. Many of these advertised products and services are not FDIC insured, nor bank guaranteed. By responding to offers advertised on this website, you may be communicating information about yourself to the company that provides such product or services - for example, that you are a Credit One Bank customer. Please be aware that these third parties may have a different privacy policy than ours. Their website(s) may also provide less security than ours. We encourage you to check individual offers, products, and services to become familiar with any applicable restrictions or conditions.

×
 Security & Fraud  

We are committed to protecting the security of your personal information. We list some activities below that we perform in order to safeguard your data and some tips that you can follow to protect your security.

What We Do:

  • We employ industry-proven standards and technologies to protect information in our computing environment.
  • We protect our systems and networks from the Internet with Firewall systems.
  • We use 128-bit SSL encryption technology to protect sensitive information that is transmitted over the Internet.
  • We maintain a Global Digital Certificate signed by Verisign® that assures you are, in fact, communicating directly with Credit One Bank.
  • We control access to your information inside our company by limiting employee access to systems and data.

What You Should Do:

  • Protect your Username and Password. Avoid choosing easily guessed words or numbers. Avoid writing your Sign In information in a place where others can view it.
  • Use the "Sign Out" button to Sign Out from Online Account Access upon completion of your session and close your browser.
  • Do not use email for account-specific questions. Email is not normally encrypted and your account information could be intercepted.
  • Review your statement information regularly for unauthorized transactions.

Alerts Regarding Phishing and Web-Spoofing:

  • Phishing is an Internet scam (spoof) in the form of an email or pop-up box. The emails and pop-ups link to sites that look like well-known legitimate businesses and ask you to provide and confirm personal, financial, or password information.
  • Legitimate businesses do not ask for this information unless you initiate a request for a service. Please DO NOT RESPOND to these emails requesting personal identity, accounts or password information.
  • Scam emails often contain misspelled words, poor grammar, awkward or unprofessional writing and typos.
  • Be suspicious of urgent or alarming appeals that request security information.

Fraud Alerts:

  • Credit One Fraud Alerts messages are provided to you at no cost. You will not be charged for alerts received.
  • Message frequency varies, as they are only sent when there is suspicion of fraud.
  • Mobile carriers are not liable for delayed or undelivered messages.
  • For help send HELP to 89283.
  • Send STOP to 89283 to end future fraud alert messages.
  • For support contact us at 1-877-825-3242.

To learn other ways to avoid email scams and deal with deceptive spam visit the Federal Trade Commission site at www.ftc.gov/spam

×

You are leaving CreditOneBank.com

If you the 'Continue' button, you will be directed to a third-party website unaffiliated with Credit One Bank, which may offer a different privacy policy and level of security. Credit One Bank is not responsible or liable for, and does not endorse or guarantee, any products, services, information or recommendations that are offered or expressed on other websites.

the 'Return to CreditOneBank.com' button to return to the previous page or 'Continue' to proceed to the third-party website.

Return to CreditOneBank.com Continue