Q. Is there ever a downside to a credit card company raising my credit limit?

A. An increased credit limit can be a good thing if the circumstances are right, says Tobie Stanger, a CR senior money editor. "It can raise your credit score—but only if you don’t increase your monthly debt along with it."

Here's the deal: If your credit limit rises but your spending stays the same, you reduce your debt-to-credit utilization ratio. That ratio is the sum of all your credit card balances divided by the total limit on your cards—and it accounts for 30 percent of your FICO score (used most often by lenders). Ideally, your ratio shouldn’t be more than 10 percent of the total limit, Stanger says.

But there's a key difference between a lender raising your credit limit of its own accord—which could be done to reward increased card use and a history of on-time payments—and your asking for an increase. The latter may trigger a credit check to prove that you can handle a higher limit. That "hard pull" can ding your score slightly.

Also keep in mind that having too many rarely used credit lines may make you less attractive for mortgage or auto loans. So how much credit should you hold? Add up all of your limits, then multiply by 0.03; that's the minimum monthly payment you'd probably owe if you maxed out all of your cards at once. If you couldn't afford that sum, decline the increase.

For related information, check our banking and credit guide.

Editors Note: This article appeared in the November 2017 issue of Consumer Reports magazine.