Although there are no guarantees that a credit card company will increase your credit line, there are some steps you can take or keep taking to help your chances of qualifying for a higher limit. Let’s dive into it!
Overview of a Credit Card Limit
The maximum amount of money you can spend on your credit card before having to pay off part of the balance is known as your credit limit sometimes referred to as your credit access line or credit line.
The credit limit on a credit card can be anything from a few hundred dollars to tens of thousands of dollars, depending on the card and your financial stability.
You can raise your credit limit and possibly raise your credit score by using your credit card wisely and making sure you pay off your balance in full each billing cycle.
On the other hand, excessive spending may result from a bigger credit limit.
The following factors should be taken into account when determining how your credit limit impacts your credit score, as well as the questions you should ask yourself before requesting an increase.
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How to Request a Credit Limit Increase
Depending on your credit card issuer, you have a few alternatives for requesting a higher credit limit.
- Send out an online request. Through their website or user portal, a lot of credit issuers enable cardholders to seek an increase in their credit limit online. Log in and send a request from your account. You might need to update certain details, including your annual income, in certain situations.
- Make a credit card company call. You can call the customer support number on the back of your card to find out if you qualify for a higher limit. If you meet the conditions, they can submit a request on your behalf. However, you might need to respond to some questions about your request and financial status. After submitting, you might hear back right away, or you might have to wait up to 30 days for a response.
Your credit card issuer may occasionally automatically raise your credit limit in response to specific criteria, such as having the card active for an extended length of time and consistently making on-time payments.
In the event that this occurs, you might receive a notification from them stating that your limit has been raised, so keep an eye out for these. This could occur even once every six or twelve months for certain issuers.
How to Be Eligible for A Credit Limit Increase
When determining whether you qualify for a credit limit increase, your credit card provider will take a few important aspects into account. They’ll be curious to know if:
- You pay your bills on schedule.
- You pay down your bill in whole or above the minimum amount due each month.
Other things that creditors might take into account are:
- Whether your income has changed recently
- Your credit rating
- Whether you’ve ever used your credit card to its limit
- The ratio of your credit utilization
- How long has the card been open? Certain creditors impose restrictions, such as a six-month or a year-long open period before you may apply for an increase.
What to Consider Before Requesting a Higher Credit Limit
If your application is accepted for a higher credit limit, you will have more available funds to use for necessities, but this comes with additional responsibility.
Before you ask for an increase in the limit, take into account these important points.
- If the lender acquires a copy of your credit score as a result of your request for an increase in your credit limit, this could lead to a hard inquiry on your credit report. However, depending on your credit card provider, there are situations where a request could result in a soft inquiry.
- If your credit limit is larger and your monthly spending exceeds it, consider whether you can still afford to pay your credit card off in whole and on time. If the response is negative, this might not be the ideal time to raise.
- Take into account your credit utilization ratio as well. Your utilization ratio may increase if your credit limit is higher and you make larger monthly purchases. This could have a negative impact on your credit score.
Tips for Requesting a Credit Limit Increase
Card issuers are not obligated to endorse your request, so here are a few tips to help the request process go smoother.
- You should be prepared with the necessary facts when you ask for an increase in your credit limit. Usually, you’ll have to supply your monthly rent or mortgage payment, your current work status, and your total annual income. The amount of the requested credit limit increase might also need to be provided.
- Have an argument ready to support your request for a higher cap. The agent might inquire as to why you require an increase in your credit limit and why approving your request makes sense. Information like your track record of on-time payments, regular and responsible card use, a high credit score, an increase in income, and more might help you strengthen your case.
- When it’s convenient, ask for an increase in credit limit. Hold off until your yearly income rises or you receive a raise. When applying, make sure you have a solid credit history and a history of on-time payments.
How to Improve Your Chances of Being Approved for More Credit
Consider the following strategies if you want to raise your chances of receiving a higher credit limit:
Maintain a Good Credit Score
Customers who have good credit—typically defined as having a FICO score of 690 or higher—have a higher chance of being granted further credit.
If you want to raise your credit score, concentrate on paying your bills on time every month, keep your credit usage rate under 30%, and maintain the open status of any older credit cards you may have since they will more accurately reflect the duration of your credit history.
Chase Credit Journey® is a useful tool if you want to apply for a credit line increase and need assistance monitoring your credit score and the factors that impact it.
Reduce Your Outstanding Debt
When reported to credit bureaus, even small statement balances are seen as debt. Because of this, a card provider can be reluctant to grant you more credit.
The possibility that a cardholder will miss payments must be considered by the bank.
Include All Sources of Income
It’s possible that you’re seeking more credit because your salary went up recently.
Make sure you’re accounting for all of your eligible revenue sources, which banks are required to permit you to do when you can reasonably be expected to have access to them.
This could include income from your partner or spouse as well as from other qualified sources including retirement payouts, child support, investment income, disability benefits, and alimony.
The Benefits of a Higher Credit Card Limit
There are many key benefits to having a higher credit limit.
Avoid the Need to Open a Second Card
You can avoid opening a second credit card to pay for important expenses when you can charge more on a single credit card.
This approach may make it simpler for some people to keep track of their transactions and handle just one credit card bill as opposed to several bills.
Earn More Rewards
When your credit limit is bigger and you have a rewards credit card, the opportunities to spend and receive rewards or cash back increase.
Low Credit Utilization
If your spending doesn’t increase in line with your greater credit limit, you can end up with a lower, more acceptable credit use ratio. Keeping your credit utilization ratio low could potentially improve your credit score.
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In a Nutshell
Think about if you would like to apply for an increase in your credit limit on your current card. Give the number listed on the back of your credit card a call if you determine that it is now appropriate to raise your limit.
If your credit score rises or your financial circumstances change, your credit card provider may choose to automatically raise your credit limit. Alternatively, you might ask for a raise yourself.
Recall that requesting an increase from a lender does not ensure that you will receive one. Information about your salary, work status, and monthly rent or mortgage payment will probably be requested of you.
These can be taken into consideration by your credit card company when determining whether to grant your request.
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