A higher borrowing limit on a Target credit card provides greater purchasing power and can contribute to a lower credit utilization ratio, a key factor in credit scores. For instance, a cardholder with a $500 limit who regularly spends $400 has a utilization ratio of 80%, while the same spending on a $1,000 limit results in a 40% ratio. Lower utilization is generally viewed favorably by credit bureaus.
Expanding available credit can be a valuable financial tool, offering flexibility for larger purchases or unforeseen expenses. Historically, credit card companies have used various criteria to evaluate creditworthiness and assign credit limits, including payment history, income, and outstanding debt. The ability to request a higher limit empowers consumers to manage their finances more effectively and potentially improve their credit standing over time.
