In this episode of PennyWise, host Nat Cardona dives deep into the pros and cons of credit limit increases with Wallethub financial expert, Cassandra Happe. Whether you're considering requesting a credit limit increase or have recently received one automatically, this episode offers valuable insights to help you make informed decisions.

Nat and Cassandra explain the two main ways to increase your credit limit: requesting an increase from your credit card issuer or receiving an automatic increase. They highlight the benefits and potential drawbacks of each method, emphasizing the impact on your credit score.

One of the key advantages of a higher credit limit is the added spending power, providing a financial cushion for emergencies and unexpected expenses. Cassandra explains how responsible credit card users who pay their balances on time can benefit from this increased limit without the stress of hitting their credit ceiling.

Another significant benefit is the potential for lower credit utilization, which can positively impact your credit score. Cassandra discusses how maintaining a low balance relative to your credit limit is crucial for a healthy credit score, both for individual cards and across all your credit accounts.

The episode also explores the greater rewards potential that comes with a higher credit limit. By using your credit card for more day-to-day purchases, you can maximize rewards and enjoy perks like cashback, travel points, and more. Cassandra shares tips on how to strategically use your credit card to earn these rewards without falling into debt.

In terms of the cons of credit limit increases, Cassandra warns about the risk of accumulating more debt and the potential difficulty in obtaining other lines of credit. She emphasizes the importance of using credit responsibly and being mindful of your spending habits.

Finally, they discuss the impact on your credit score when you request a credit limit increase. While an automatic increase often involves only a soft credit pull, a requested increase usually results in a hard pull, causing a slight dip in your credit score. Cassandra offers a pro tip: ask your lender if they're willing to increase your limit without a hard pull, as some may accommodate this request.