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3 I MONEY MATTERS lls | Thursday, December 22, 2022 | = EXPERTS SAY THERE ARE 2 PROS AND CONS T0 E ACCEPTING AN INCREASE “TO YOUR CREDIT LIMIT SRIVINDHYA KOLLURU atid red-hot inflation, Cana- is are increasingly depend- aan on credit cards to cover ev- eryday purchases. A rece! port by Equifax Canada Puan credit card balances are on the rise, and the average credit limit A $5 800, Jason Heath, managing part- er at Objective Financial Part- ners, explains banks will often e biggest credit limit in- creases to the people who least need it. "In other words, this i i or ten someone who has a goo: come and good credit foo he Say vf ‘youhave bigs ort ae es coming up, credit limitis ‘worthe considering, says personal finance expert Ru- bina Ahmed-Haq. "If you have a time in your life that's coming up where you are going to have to onnewcardsi: the highest it's been in the past seven years. With budgets tight, should you consider a limit increase to your credit card if your bank of- fers one, even if you haven't re- quested it? put alot of big credit card, it's nice to have the room so that you can just do those in one transaction." Another advantage to accept- ing a credit card limit increase from your bank, even if youfeel it is not needed, is that it can be MY BANK HAS OFFERED ME A CREDIT LIMIT INCREASE | DIDN'T REQUEST. IS THERE ANY REASON | SHOULDN'T TAKE IT? good for your credit rating. "The reason it can be good for your credit rating is your credit utili- zation rate goes down if you have access to more credit," rate refers to the amount of cred- it you're using compared to your total available credit across products like credit cards and lines of cred: But Heath and Ahmed-Haq warn that there are also disad- vantages to accepting a limit in- crease. "One drawback is if you have access to more credit an you end up using more rate you could get yourself into finan- cial difficulty by having expo- sure to too much cre "If you are looking to doa mortgage application in the near future, you may not want to take that increase on the credit card, because it will show you have greater liability," says Ahmed- Haq. ed-Haq says you need to be aware of your spending habits before accepting a limit in- nt you have the kind of per- Are you the kind of spender who would use the credit if you had it? If so, think twice before accepting an increase to your limit, experts say. Dreamstime photo sonality that ifyou have access to more room on your credit card that you're likely to spend, then you also have to do that self-as- sessment and ask: 'Do I have the self-control to not run up this redit card if I have an extra $5,000 room on it?" ot HALTON = | AUDIOMETRIC CENTRE HEARING AIDS & AUDIOMETRY Georgetown’s trusted choice for hearing care 905.877.8828 Aemsttong Ave 360 Guelph St., Unit 44 THB DEPARENT —_— Georgetown READERS’ | ““*"™? A (519) 855-9940 In the Knolcrest Cent 2022 = (In the nolcrest oa) [ | Coop Ef: )) 833 9180 TOLL FREE 1-877-232-0229 theifp.ca