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How big should your credit card limit be? Whether it is high or low, a credit card limit determines how much you can purchase in terms of value. When determining your credit card limit, the lenders mainly look at your credit score. When you have a good credit score, you are likely to qualify for a $100,000 credit card limit and more.

While your credit score is important, the issuer of the credit card may also look at your payment history before deciding to award you a higher credit card limit. After years of using your card, you may find yourself eligible to apply for a higher credit limit.

Depending on how you use your card, a $100,000 credit card limit can be good or bad. In this write-up, we discuss the best and worst things about such a high credit card limit.

The Best about $100,000 Credit Card Limit

With a higher credit card limit, you can make more purchases and spare some money for unforeseen future emergencies. The following are some of the good things about getting a higher credit card limit:

1. Increased Buying Power

Obviously, having a higher credit card limit enables you to make larger purchases. It is, therefore, easier for you to buy major appliances, computers or other gadgets. After all, you may not be ready to spend all your cash to make such purchases. A higher credit card limit allows you to make a major purchase all at a go.

2. Great for a Rainy Day

Life happens. Issues such as medical bills, car repairs, damage to your home, and others keep arising as you live. If your credit card limit is high enough, then it is likely to get you out of a huge jam. Say you need to make repairs to your house. A higher credit limit enables you to spread your payments over a longer period of time.

3. Improving Your Credit Score

Did you know that the debt-to-credit ratio greatly determines your credit score? With a low credit limit, any slight payment you make will drastically affects your credit score. However, if you have a high limit credit card, then the debt-to-credit ratio is much lower. This helps improve your rating to a large extent.

4. Peace of Mind

This emanates from the fact that your credit rating will improve. In addition to the other advantages you enjoy, you will get greater peace of mind. Due to the assessment of other lenders as a trustworthy borrower, you will end up attracting them to you. The good thing about it is that you will be sure you are financially on the right track.

The Worst Things about $100,000 Credit Card Limit

No one said that raising your credit card limit is a ticket to happiness. After all, money can buy things but not happiness. With a higher credit limit, the likelihood of you increasing your debt increases tremendously. Even so, you are at the risk of paying higher interest. The following are some of worst things about having a higher credit card limit:

1. More Debt

People who can borrow more tend to have higher debt levels. In fact, a higher credit card limit means you can spend more. If you are not careful, you may end up in a debt hole you could have avoided if your credit limit was lower. That calls for paying attention to how and on what you spend your money. That way, you can prevent ending up heavily indebted.

2. High Interest

If you fail to fully pay your monthly credit card balance, you may end up being slapped with high-interest rates in the future. That only means paying more.

3. Over-Reliance on Credit Cards

A high credit score will enable you to qualify for other credit cards. That could make you over-reliant on the cards, thus piling up your growing debt. In the end, it could even affect your credit rating.

4. False Sense of Security

Even with a high credit card limit, you need to strictly monitor the way you spend your money. If anything, having an increase in your credit card limit doesn’t necessarily correspond with an improvement in your credit score. Any sense of security you get can only be false.

What if the company offered you a $100,000 credit card limit? Well, don’t celebrate yet. Although you will enjoy a number of benefits, you may just end up worse off.