I just picked up a used Trek 730, and the handlebars are too low. I loosened the hex bolt to raise them, but the front brake cable gets really tight when I raise the bars, and applies the brakes. I don't see any play in the brake cable. Is there a way to get some slack out of the cable?

You might have to get new cables. We can give you a better answer if you post pics - you can't post pics here directly until you have 10 posts but you can put them somewhere on the internet and put the URL to the them here.

If it's a 730 the cables and housings are most likely ancient, so you would do yourself a favor by replacing them, anyway. Then you can cut them to whatever length works best.

The cable with the outer casing, goes into the top of the stem, and just the wire cable comes out the bottom. Does that matter when getting a new one?

Why do you think the bars are too low?

What you do is buy the pieces, housing and cable, then cut them to the lengths you need. If you don't feel confident doing it yourself, it should be a relatively fast job for any bike shop. If you have too many questions, don't try it yourself.

I suppose it does. As others have said, if you raise the bars, you will (likely) need longer cables. Inner AND outer. But, as you say, because of the housing stop on the front brake (rear as well probably) the inner core is considerably longer than the outer housing. I just took a look at your bike. Those old steel threaded headsets and the complimentary stem technologies don't have a ton of adjustment possible. You have to keep a certain minimum of stem inside the headtube (around 2") and I'll bet money you are close to that right now. What you probably need is handlebars with more 'rise' than the present ones. You will still (likely) need longer cables. And to the point of post #5 ... classic geometry for those hybrids has the top of the handlebars right at the height of the saddle, plus or minus one inch.You risk looking like a total wuss (if you are a guy) with your bars much higher than an inch above seat height. HTFU and use the savings to buy fresh brake pads, the ones on the bike are (likely) dried out. If you are a gal, please forgive my display of mouth-breather insensitivity and sexism and raise away.

If these by some odd chance happen to be the original cables and housings, then I'd think that they'd have been cut to allow for extension of the stem to it's max height.

So trying to go higher might require more than just cables and cable housings.

This is a quill stem isn't it? You don't want the wedge up near the top headset bearing race even if you don't care about minimum insertion for safety.

Years ago I put a new stem and bars on my old Trek 930. Got rid of the thru-stem cable routing and added this for a cable stop. Original cable was easily long enough. Maybe you could try something similar. Good riding.

The stem has a minimum-insertion line. It's highly likely that raising the bars would put the stem above that line. In addition to replacement housing and inner wire, you probably need to buy a new, taller stem to enable you to raise the handlebars safely.