Using credit is second nature to some people. It can help with cashflow shortfall, unexpected expenses or simply reduce money-related stress knowing you have something to fall back on if your finances suffer a shock. Having access to credit is not usually the most difficult part of managing money for most people, in a lot of cases, it’s calculating how much credit you need in order to ensure your finances can continue to flow no matter the predicament you may face. Revolving credit is preferable for many people compared to fixed term loans as it offers continual access to cash, but sometimes your limit isn’t sufficient, and you may be considering asking for an increase. Some lenders may not facilitate this, but most lenders providing an unsecured personal line of credit are able to increase – or decrease – the amount of credit you have access to. With a Polar Credit account, it is possible to increase your credit limit from time to time.
A credit line is a type of revolving credit, meaning you can withdraw the funds up to your agreed credit limit as often as you need in order to manage your money effectively. The money is deposited directly into your bank account so you can meet your direct debits, standing orders or simply use your debit card as normal.
Credit lines require at least a minimum payment each month – just like credit cards – which means your repayments are fairly flexible, giving you even more control over your finances. Credit lines are available online so in most cases you can apply any time of the day. The applications are quick to complete, and you receive the lending decision within minutes. Lenders tend to use automated algorithms to assess your application so the whole process is as quick as possible for you.
In an ideal world, you would never need to borrow money because you would never experience unexpected expenses. Unfortunately, life is often less than ideal and using credit might be the only way to keep your cash flowing. In some cases, you might need to increase your credit limit because you’ve had an additional surprise cost arise and your existing limit just won’t cover it. In other cases, you might be planning a large expense, and you just need to borrow a little more than you currently can.
Instead of increasing an existing credit limit, you may choose to open another account or apply for a new credit facility instead. There are pros and cons to both options, and ultimately you have to decide which type of borrowing is going to be the easiest to manage. You might prefer to have one large repayment going to one creditor each month, or you may prefer smaller individual repayments going to multiple creditors – this may be preferable if you have different purposes for each credit facility as well. For example, if you need to borrow to replace your car tyres, you might choose an instant payday loan instead of increasing your current credit limit so that you know when the money for your tyres has been repaid.
You should generally try to avoid having too many credit facilities open at once however, as it can be interpreted negatively by future lenders. Try to make sure any loans are settled before applying for new credit if you can – and where possible, always actively reduce the amount owed on your lines of credit (rather than just paying the minimum payment).
Just because you have a line of credit with a lender already, this doesn’t guarantee that your request to increase your credit limit will be accepted. Lenders have to make responsible lending decisions which could include declining your request if they feel the increased repayments would be unaffordable. You may be subject to additional assessments and your credit limit could actually be reduced if the new findings show that the current repayments are unaffordable.
While there’s no way to ensure your request would be accepted, staying within the terms of your agreement, and making your other financial commitments on time is a strong starting point.
There are so many reasons why you may need an extra helping hand from time to time. However, it’s important to remember that borrowing money is not always a sensible way to resolve financial difficulty, especially if you’re already struggling with your existing financial commitments. Borrowing is designed to help – not hinder – your money management.
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