Potential downside of a credit limit increase
Increasing your limit could:
- Be a factor down the track, as lenders consider your credit limit when you apply for a home loan (the bigger the credit limit, the bigger the liability to lenders)
- Tempt you to spend more money, which might not be a good idea if you can't pay it back
- Increase the interest you're accruing – having a higher credit limit makes it easier to overspend and could make it harder to pay off your full balance each month.