How to Increase Your Credit Card Limit
Having a higher credit limit has plenty of advantages, from being able to spend more on your credit card, to having a higher credit score which is partially calculated by your debt to limit ratio. You may want a credit limit increase because your lender just caught your limit without giving you any warning whatsoever. But, your task is to convince your credit card company that you are a trustworthy borrower and you can do that by a few simple steps.
Without any doubt, the credit card company will first check your credit history. So, if you have a clean record and pay your bills on time, that’s only going to help you get that credit limit increase for sure. Even if you have a few little mishaps in your credit history, just make sure to pay off the existing debt and avoid obtaining large amounts of new debt or penalty fees.
Another vital point is if you just received your credit card, you’ll likely have to wait six months or longer in order for them to consider raising your limit. So, with this make sure you’re using your credit card wisely and somewhat consistently.
Lenders base your credit limit on their assessment of how risky a borrower you are. If your spending is out of control or unpredictable, that will only make you look like you’re not a trustworthy customer.
Once you’ve built a solid foundation with your credit card company, don’t be afraid to negotiate for what you want. If they don’t offer an online limit increase request form, call and make a persuasive case as to why you deserve a limit increase. But make sure the request is not far out there. Be reasonable because the creditors are not permitted to offer a number to suspicious customer if you throw in a far-fetched number.
Why a Credit Limit Increase
For most people, getting a credit limit increase isn’t what they actually need. Before you consider taking a credit limit increase, do some quick check of your credit status, spending habit and what you need an increase for. Don’t get an increase just for the sake of it or to rack up your debt profile.
Rather than going for a credit limit increase, there are also other option to consider in order to put your finance in a stable condition in this current economic pinch. Paying down your credit and getting a low-interest rate card should stabilize your finance, which seems contrary to increasing your credit card limits
Type of Credit Limit Increase
There are mainly two ways to get a credit limit increase: automatically and requesting for it. Your lender met decide to increase your credit limit if you meet some set rules and the other way is to apply for a credit limit via your credit card online portal or call the credit card customer representatives.
- Automatic Credit Limit Increase
One good thing about getting an automatic credit limit increase is, you won’t get a hard inquiry which met affect your credit score. Most credit card companies will automatically increase your credit limit at least once every 6 to 12 months.
A lender will consider you for an automatic increase if you use your credit card responsibly and pay off all your balance as at when due. Their assessment will be based on how risky a borrower you are.
To get an automatic credit limit increase you most build a positive payment history, try not to make a late payment as this may affect your payment history. Also, use your card more often as this will pass a positive message to the lender.
- Requesting a Credit Limit Increase
While some credit card issuers automatically increase your credit limit if you meet some certain conditions, others will only increase your limit if you ask for it. Requesting for a credit limit met and met not affect your credit score depending on what method the lender used in accessing you. Most credit card companies use the hard inquiry which could affect your credit score when you request for a limit increase.
The process of requesting for a credit limit increase is quest simple. You can either choose the online method or by just dialing the line at the back of your credit card or on your monthly billing report. You can also choose to call the customer representatives to ask for an increase in credit limit.
How to Increase Your Credit Limit Online
Choosing to increase your credit limit? Your credit card online account should where you go first.
- Log in into your account
- Location the link for “Credit Card Limit Request”
- Read the terms and condition which is very important
- Fill out the request form with all necessary and valid information, then submit.
Online request is straight forward and you can get a response the next minute via your mail address.
Tips for Approval
Getting an increase in credit limit met be sometimes tricky so, having all the needed information to get approval is important but, you shouldn’t request for an increase too often as this met affect your credit score.
Below are some tips to get approved of your credit limit increase request.
Frequent use of your credit card. If you make use of your card regularly and pay up all your debt on time, it passes a message to the credit card company that you are responsible in the way you handle your credit.
Avoid late payment and pay up all your balance in full. If you pay up all your credit on time, it’s going to have a positive impact on your credit history which will boost your chance of getting an approval.
Have a high credit score. Either it’s you getting a new card or requesting for an increase in credit, your credit score is very vital. Protecting your credit score should be one of your financial priority.
Be reasonable with your request. Requesting for an outrageous amount will only mean one thing, that your request has a high chance of rejection. Your request should not go above 15% – 25% of your current credit unless your circumstances have drastically changed.
Don’t make your request too often. Requesting an increase in credit concurrently will only worsen your credit score and limit your chance for getting approval.
Get a card with high credit. To avoid the hassle of requesting an increase in your credit, you can settle it from the onset by going for a card with high credit. If you meet the requirement, going for a premium card which offers high credit limit will save you the stress.
What to Consider Before Requesting a Credit Limit Increase
On getting your credit card, issuers have set a limit on your card based on some factors which you fill out while applying like, your income, expenditure, your current debt, and your credit score.
Requesting for a credit limit increase can have an impact on your credit score, so, before considering putting in a request form for an increase, it will be nice to consider whether these factors have changed.
Can you meet the monthly minimum repayment fee? Getting a limit increase will also mean that your monthly repayment fee will increase.
High debt risk. Having a high credit limit could also mean an increase in your spending, which met get you to more debt if you’re not watchful and disciplined with your finance.
Potential rejected application. If your request gets rejected, it will affect your credit score which also means that you will have to wait for months before requesting an increase.
Some credit card issuers will charge you when your request is approved. Before requesting for an increase, check to see what are the terms and condition for the particular card you’re carrying. Some cards charge up to $60 when your request for a credit card increase is approved.
The benefit of Increasing Your Credit Limit
Some certain benefit comes with an increase in credit limit which can be seen below.
Boost Your Credit Score. Having a higher credit limit will a positive impact on your credit score as it is assumed that those with much-unused credit can manage their credit compare to those that use up all their available credit.
Increase Your Spending Power. Having more means, you will have the power to spend more. An increase in your credit limit will also boost your spending power as you will have more to spend.
Helps in Emergency. Having more excess credit will give you a lifeline in case of any emergency spending. Say your car broke down and you’ll need to fix the engine which does not come cheap, it will be easy to pay with your credit card that’s if you have excess credit on it.
Lowers Your Credit Utilization. Having a higher credit limit will only mean that your credit utilization will be low because you will have high credit and your debt to credit limit ratio will be low.
Lenders will eventually reward borrowers who use their credit cards responsibly. However, whatever you do, don’t use an increase credit limit to rack up an outstanding balance that you won’t be able to pay off.
If you’re not happy with your current credit card you can check out our list of the best credit card according to their categories to get a better perspective of your credit card.