Unless misused or abused, higher limits often help your credit score. The more available credit you have and the less of it you need to spend, the lower (and better) your credit utilization ratio. Your credit utilization is a major factor used in calculating your credit score.
If, however, you decide to go on a spending spree and can’t pay back your balance, a high credit limit will be counterproductive. Any debt you fall into can, if unchecked, lead to negative consequences for your credit. Avoid spending more than you can pay off by your billing due date since carrying a balance will mean accruing interest charges unless you’re within a 0% intro APR period.
How do you maximize credit cards with a high limit?
For some cardholders, maximizing credit cards with a high limit means being able to make many or large charges on a single card. Two other ways to maximize cards with a high limit, though, are to optimize your rewards earning or to take advantage of introductory APR offers.
Maximizing the rewards on a high limit credit card can be as simple as finding a card that offers extra rewards in purchase categories that are meaningful to you. Combining the right rewards program with purchases you’d make anyway can lead to additional points, miles or cash back.
Using an introductory APR on a high limit card, on the other hand, allows you more time to pay off purchases or balances without accruing interest at the standard rate. When used responsibly, a 0% APR offer is a strategic financing tool.
Pro Tip
High limit credit cards should not be used to make more or larger purchases without solid plans to pay down balances in full and on time. Although a high limit may be tempting, accruing interest will undo the benefits of your high limit card.
