When Tennessee residents receive an offer to increase their credit limit, they may see that as a good offer. In some cases, a higher credit limit could be seen as a positive thing as it may indicate that creditors trust that the balances will be paid. However, high credit limits could also mean that there is a high chance to accumulate unmanageable credit card debt.
Having more credit may cause individuals to think that they can make bigger purchases. What individuals should remember, though, is that those purchases must be paid off, and if the income is not available to pay off the credit balance from those purchases in a timely manner, interest could begin to accumulate. A larger debt burden can come along with accumulated interest.
Some parties may believe that they are responsible enough to handle the higher limit and stick to their usual spending. However, those parties may also share accounts with children or other individuals, and if those individuals overspend, the cardholder's credit could be negatively affected. Though parents may want children to have a credit card in case of emergencies, if those children are not fully aware of how their spending could affect a financial situation, there is a chance of increased debt.
Financial hardships can come about suddenly, and the confidence of having an increased spending limit could spiral into a substantial credit card debt burden. If an individual has found him or herself in an unmanageable debt situation due to overspending or other issues, considering bankruptcy may be a wise option. This debt relief course could help Tennessee residents get back on the right financial track.
Source: macon.com, "Ashley Eneriz: 4 dangers of increasing your credit card limit", Ashley Eneriz, Feb. 2, 2015