I Asked for a $30,000 Credit Limit. Here's What Happened

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Our area is prone to power outages, so much so that we used to experience them weekly. For someone like me who works from home, that's not only annoying, but it can lead to a serious loss of income. So my husband and I knew we needed to put an end to those constant disruptions.

To that end, we decided to invest in a standby generator -- the kind that's tapped into your natural gas line and goes on automatically when the power is cut. We had the money in the savings account to pay the roughly $10,000 it cost. But because there was no extra charge for using a credit card, we decided it made more financial sense to charge it and get the cash back .

There was just one problem, though. We only had a $15,000 credit limit on our favorite credit card and had some other charges pending. So we decided to ask our credit card company to double our limit to ensure that we could charge our generator and still have a little wiggle room.

Our credit card issuer agreed. But there's a reason for that. So if you're interested in having your credit limit increased, you should know what it takes to make that happen.

How to score a higher credit limit

If you want a higher spending limit on a credit card, it pays to call and ask for one. Even if your income hasn't changed much, you may have a pretty easy time getting approved for a small increase if your account has been open for a while and is in good standing -- meaning, you're current on your payments.

To snag a larger increase like we did, though, you may need to show proof of a higher income than what you had when you first applied. When we initially got our favorite credit card, I was earning a lot less, but my income had doubled by the time we wanted our increase. And my husband's income had gone up a bit as well.

Because of this, and since we'd had the credit card for a few years and paid every bill on time and in full, we got what we asked for.

A higher credit limit could be a blessing and a curse

The upside to having a higher credit card limit is that you get more leeway to charge expenses in an emergency. Also, a higher credit limit could help your credit score improve.

One of the factors that goes into calculating a credit score is credit utilization, or the amount of revolving credit you're using at once. It's best to keep your utilization at 30% or less for the benefit of your credit score. With a $10,000 spending limit across your various credit cards, you'd ideally want to keep your outstanding balance to $3,000 or less.

But let's say you owe $3,000 against a total credit limit of $15,000. That's just 20% utilization, which is even better for your score.

However, having a higher credit limit could also lead to higher spending. And if you're then unable to make your minimum payments on time, your credit score could take a serious hit.

Plus, a higher balance will generally mean paying more interest to your credit card company. So if you're going to get a credit limit increase, ensure you manage it wisely.

We felt comfortable doubling our credit limit because we had a specific purchase we were looking to make and the money in savings to pay for it. We also have a history of being disciplined spenders and paying our credit cards off in full.

If you're not sure you trust yourself with a higher credit card limit, don't ask for one. You may be much better off giving up some reward points or cash back and paying for a large purchase by check or debit card than opening the door to excess spending that takes a toll on your finances.

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