Or, to make the scenario fit our experience closer, the 22-year-old who quit his executive position to save on dry-cleaning, and now works as a minimum-wage greeter at Wal-Mart? And the kid’s mother is praising that quit as an act of maturity and responsibility?

OK, so the Bush tax cuts didn’t cause as wide a revenue disparity as executive-to-greeter, but the principle is the same: About half of last year’s budget deficit is because taxes were cut. As long as we have people calling tax cuts a fiscally responsible action, we’ll have people praising the action that led us from “the national debt will be paid off in 7 or 8 years” to “OMG, the debt’s going to strangle us!”

Is it smart to stock up on extra free high calorie ice cream? Well of course it is, its free and you don’t have to eat it, its just an option. Would your answer change if the person was trying to go on a diet and was notorious for falling off the wagon?

What about an alcoholic trying to get sober, A well stocked liquor cabinet is just an option and who knows when you might need some extra alcohol, for cooking perhaps. I mean you don’t have to consume it, it’s just a free option right?

Or if these examples are considered poor analogies because they are not financial, what about your 22 year old kid who wont move out of the basement and get a job even though he is capable and has skills that could get him employed. Is it wise for him to raise the credit limit on all his credit cards? Does that increase or decrease the odds he will attempt to get a job and provide for himself? The 22 year old who is given the option to raise his limit would obviouslywant to. But is he better served by staying in the basement and staying dependent or by getting forced to make a tough choice that serves him well long term. If your kid was the 22 year old and he could get his credit limit raised continually with no cost to you and with no carry cost to him would you be happy to let him live that way the rest of his life? Would you recommend he should repeatedly take that deal knowing it will likely result in him becoming a permanent bum?

I believe there are larger issues than the theoretical issue that free leverage is a no brainer? Free leverage tends to be like a drug. It allows living in an altered state of reality. For those already living in that altered state, giving them more ensures they will stay in that state longer.

I agree that you should always raise your credit limit if is a pure option. But you shouldn’t always raise the limit of others have access to your credit cards and can stick you with the bill.

That’s why they posit that if one continually hits one’s credit limit that one should not seek to raise it. Not raising means you have to stop borrowing. Raising it means you’ll just borrow more and go further into debt.