I checked my Capital One account this morning to see if my most recent purchase (yet another car repair) was posted. What I saw was that my available credit was different. Way different. Like, $5000 more different. Yup. The folks at Capital One took it upon themselves to increase my credit limit to $7,000 (if only my savings balance could change just as magically....).
For a nanosecond, I was delighted that my [leveraged] purchasing power increased. What I'm most happy about is that this increased credit limit is helpful for my credit score. I've already decided to spend no more than $2,000/month on the credit card (heck, I've been doing that since I've had the card); so even though I have a higher limit, $2K is stuck in my head. Also, I'm committed to paying off my credit card balance each billing cycle. You already know that- looking at my budget- it is not within my means to charge up to $7K a month (billing cycle), and maintain my commitment. At best, with all of my savings and bills that don't accept credit cards (ex. car insurance, student loan, car note), I could charge just under $1400 (for food, gas, cell phone bill, etc.) and pay it off .
All things being equal, we know that folks who carry a balance under 30% of their available limits fare better than those who carry a balance of 50% or more of their limits (check out the last paragraph of this article). Even if I reverted to my balance carrying ways, this new credit limit increase helps position me in the former group (do the math, $2,000 of $7,000 is just over 28.5%)