promotion image of download ymail app
Promoted
Frank asked in Business & FinanceCredit · 3 months ago

How does credit increase after being used?

Hello,

I got my first credit card at Bank of America. I made two purchases online. I was wondering how does credit line increase ? Does it increase when I pay back the amount or do I have to add money in it.

Update:

I have cash rewards card.

6 Answers

Relevance
  • 3 months ago
    Favorite Answer

    You could see your score rise somewhat after you've made a steady payment history for a period of time. It's not going to happen overnight.

    • Commenter avatarLogin to reply the answers
  • 3 months ago

    Once you pay your balance, the credit line rises back up the amount you paid.

    • Commenter avatarLogin to reply the answers
  • 3 months ago

    After you have paid on time for about 6 months to a year they will increase your credit limit. However your question is a little unclear.. You have a credit line of say $500.00. You spend $100 on the card. You then have $400.00 credit available. If you pay the $100.00 you spent, plus any interest, your credit limit goes back to $500.00.

    • Commenter avatarLogin to reply the answers
  • Eva
    Lv 7
    3 months ago

    Your credit doesn't increase when you pay, it replenishes. You don't "add money" to a credit card. Your credit line will not increase for at least a year from when you opened it. Example: Your credit line is $1000. You made 2 purchases totaling $200. You have $800 remaining to use. You make a payment of $100. You now have $900 credit to use.

    • Commenter avatarLogin to reply the answers
  • How do you think about the answers? You can sign in to vote the answer.
  • Shay
    Lv 7
    3 months ago

    Your CREDIT LIMIT is the limit on the card.  It is the maximum amount that you can spend on the card.  You can repay and reuse that limit as many times as you want to.  That limit increases when the company feels you are worthy of a limit increase.  In most cases, your card limit will be reviewed about once per year and either increased or decreased based on your payment history and your credit score.  You do NOT "add money" to a credit card.  Your spending capacity on a credit card is based on the credit limit and how much of that limit you have not yet spent.  

    Your CREDIT SCORE is a number created by a complicated algorithm created by the credit bureaus to measure your credit worthiness.  Many things go into your credit score.  Things like on time payments and not using more than 20% of your available credit limit are considered.  Certain things can also lower that score, such as having a bill sent to a collection agency or using more than 30% of your credit limit on your cards.  Applying for more credit is considered a "hard inquiry" and can lower your score.  TIME is the biggest thing that will help a score as long as you are doing nothing that actually hurts your score.  Having a good credit score increases the chances that the card company will raise your credit limit.  

    The fact that your card is a rewards card make no difference on the above descriptions.  It just does not matter at all.  It doesn't increase either type of credit any faster than any other kind of credit card.

    • Commenter avatarLogin to reply the answers
  • Amy
    Lv 7
    3 months ago

    Your credit limit is the maximum amount that you can owe. When you pay back the amount that you have already borrowed, that credit will become available again.

    For example, if your credit limit is $1000 and you have borrowed $300, then you are allowed to borrow another $700. After you pay back the $300, you can borrow the entire $1000 again.

    Your credit limit is however much the bank is willing to lend to you. When you have built up a good history of paying back your debt on time every month, you can call the bank and apply for a higher limit.

    • Commenter avatarLogin to reply the answers
Still have questions? Get your answers by asking now.