Building credit - should I accept increased credit offer from Amex?

SevenOfWine

I took out a high interest rate credit card from Amex last year, the only one who would accept me, in order to create a credit record. I use it to buy groceries and pay it off in full every month. They have now twice offered an increase in my limit. I am nervous LOL. Should I accept this?

sparelogin

Definitely.  You don't need to spend more than you can afford.

Ebe_Scrooge

It's worth accepting, as long as you can be disciplined enough to never spend what you can't afford to pay back (i.e. just keep doing what you're doing now).  You're doing absolutely the right thing by using the card regularly and paying in full every month - KEEP DOING THIS.  This will be doing a lot of good in terms of building up a favourable credit history.  An increased limit will also be another plus point on your record, in that it shows other lenders that Amex trust you with more credit.

Your score will almost certainly drop, as it does in response to any change whatsoever in your credit status.  Thankfully your score is as much use as a chocolate teapot, and is neither seen nor used by any lender.  The good record of borrowing & repaying that you're building up is what counts.

SevenOfWine

Thanks to you both!

cymruchris

Yes - just to add - go for it - but keep your spending patterns the same - don't go out and book a holiday to Australia! (Well you can't go anyway so that's ok!)

dr_adidas01

cymruchris said:

Yes - just to add - go for it - but keep your spending patterns the same - don't go out and book a holiday to Australia! (Well you can't go anyway so that's ok!)

Why not I always use my Amex to book my holiday to see family in Australia? 

Or do you mean if you do book a holiday to Australia make sure you have the money to pay  it off beforehand? 

cymruchris

dr_adidas01 said:

cymruchris said:

Yes - just to add - go for it - but keep your spending patterns the same - don't go out and book a holiday to Australia! (Well you can't go anyway so that's ok!)

Or do you mean if you do book a holiday to Australia make sure you have the money to pay  it off beforehand? 

Mostly this  

kimwp

If you accept the limit increase and keep your spending the same, then you will improve your utilisation rate (how much of your available credit you use), which is a good thing for future credit/loan/mortgage applications as it shows you have control of your borrowing.
The caveat is that there is a maximum amount of credit/loans you will be able to access (based on wages etc, though I don't think there's a universal calculation), so if you might want to apply for a different credit card for the perks it offers, you might want to bear this in mind. For example, there's a credit card that gives decent cash back on the first £3000 spend in the first two months*. I would never spend that normally, but once I've saved up to do the bathroom (so I can repay fully), I'll apply for that card to get the protection on my purchases and the cash back as nice little discount perk.

*numbers from memory, may be wrong