Can I Provide Collateral to Increase My Credit Card Limit?
In the video below, Motley Fool analysts Michael Douglass and Nathan Hamilton take a user-submitted question about whether you can provide collateral to increase your credit limit.
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Michael Douglass:Dalton asks, "Let's sayI wanted to make a large purchaseexceeding credit limit toreceive bonus and points, and thenimmediately pay off the balance. Could this be done byshowing the credit card company thecash amount of the purchasein a checking or savings account?"Nathan Hamilton: Notthat I know of.Douglass: Not that I know of, either. Hamilton: What you'llwant to do is check with your issuer. If it's an option,perhaps request a credit limit increase before you do so,because maybe they're willing toincrease your credit limit. Fromresearch we've seen and from personal experience myself,credit card companies like to increase your credit limit. There'sobviously reasons behind that, andyou want to be careful about it. But,I would say, look at it that way. I haven't seen any instances where provingcollateral, showing collateral will help increase your chances. Douglass: Yeah,absolutely. Andgenerally, they're not going to allow you to spend above your limit. But,if you ask them to increase your limit instead, then game on.
Nathan Hamilton owns shares of Facebook. The Motley Fool owns shares of and recommends Facebook. The Motley Fool has a disclosure policy.