I received a letter in the mail from one of my credit cards that told me I was eligible for few upgrades. I immediately called the number to see what they were offering.

I was told that I could get one of the following options:

  • 3 points per dollar for every dollar spent
  • $300 credit limit increase
  • 0% balance transfers until July 2009.

I opted to take the $300 cash increase and I will explain why below. I have not been using this card for purchases because I get 5% cash back with another card already. Getting 3% would not benefit me in any way because I am already at a higher cash back award with another card.

I also decided against getting the balance transfer because I have already used this particular card for balance transfers in the past. I only have about $350 available credit left on this card so it would not make sense for me to get a balance transfer (which includes fees) on that small amount.

I took the credit limit increase because this is the one that will benefit me the most in the future. I can always use a higher credit limit on this card because it is one of my longest standing cards so it has a great credit history on it.

Now I do not plan to use the extra credit for purchases because that will just bring my utilization ratio to an uglier number. Instead I am using the ‘extra’ $300 as a cushion that lowers the rate of utilization on that card. I am paying off the current balance transfer that I did on that particular card and it is just nice to have that money.

So should I regard that $300 as income for the month? Can I now say I am $300 richer….or do I just have the potential to get $300 deeper into debt?