Want to Keep Your Credit Card or Increase Your Limit? Better Use it or You May Lose It!

If you have credit cards that you rarely use, and they have a credit limit that you might want to increase one day, you might want to think about using that card more often before you ask for a credit limit increase.



With the current economic crisis and banks suffering with more and more people becoming unemployed and owing them large sums of money, some banks are tightening their controls and reducing the limit on credit cards that are rarely used, and in some circumstances they are canceling credit cards that have not been used for as little as six months.



Some people use credit cards all the while, purchasing virtually everything with them, and then paying off the full balance when the statement falls due.



I admit to finding this means of paying for things very convenient, and in the past I have always had a good credit rating and good credit limits on my cards, in fact as well as banks virtually falling over themselves to give me credit cards, these cards have often had significant credit limits, as much as $10,000.



For the financially wise person who enjoys having credit available but who keeps a good control on their finances, there is a certain comfort in having credit available if you need it in a hurry, for example the sudden impulse to buy a car or truck, or to buy an airline ticket.



My wife is the opposite however, not wanting to use credit cards because of the risk should you find that you are unable to pay off the balance at the end of the month. Instead of using credit cards, she used cash or debit cards, and keeps a tight control on the balance in the bank account.



The philosophy in this case is "if you haven't got the money, you can't buy it".



The problem arises then when you want to purchase something in a hurry, like airline tickets, and you find that the spiraling cost of travel has taken the price of flights above the available credit on your credit card.



If you haven't used the card to make many purchases in recent months, and also if you haven't used it to make any large purchases either, it's very likely that the bank will refuse to increase the limit, which can be very frustrating indeed.



It's also possible that if you haven't used the card at all for over six months that even if you do have sufficient credit on the card, the bank will refuse to allow the purchase, and will suspend the card.



I have had both these things happen to me in the last six months, which is very frustrating indeed, because in the situation where you need to use the card, the purchase could be time critical, like purchasing flights where only a few seats remain.



In the last twenty years or more many of us have been used to finding it easy to acquire credit cards, and have seen our incomes gradually increase each year.



In the last several years we have seen the opposite however. Many people have lost their jobs, and not only have pay rises been smaller and less frequent, salaries have also been reduced for a lot of people.



We are not living in the same world that we lived in twenty years ago, where obtaining credit was relatively easy. Now the banks are realizing the need to tighten their controls, and just because you might have a number of credit cards with high credit limits, doesn't necessarily mean that you will be able to use them when you need to.