How To Increase Your Credit Limit
Even if you know some of the reasons that you should increase your credit limit, that information will not help you unless you know how to actually get it increased. So, here are some tips for how you can increase your credit limit.
- Call the credit card company – This should be obvious, but you will have to make the first move and give them a call to ask for an increased credit limit. While the credit card company may occasionally give you an increase without you asking first, most likely, you will have to take the initiative. The number should be on the back of your card, but if it’s not, every company should have some type of contact page that you can get a hold of them through. Sometimes you will be able to request an increase online, but the easiest way might be to just pick up the phone and call.
- Have a good reason – This goes hand in hand with the first section, but have a good reason ready for why you are asking for this, because they will ask. The last time I did it, I was going to be going on vacation a few months later, so I told them I needed the higher limit for spending during that vacation. Have a good reason, even if it is that you want to improve your credit score. Again, if you are desperate, they will know. They have to ask, but it is more of a formality to try to screen you.
- Don’t ask too soon after opening the card – If you have just opened the card within the past few months, it may be too soon. It is best to wait at least six months before you inquire about an increase. This way you will have built up a history with the company and they will be more likely to trust you with a higher limit. This could also be impacted by what you put on your card… if it is just routine trips to the grocery store and gas station, they may be more likely to give you an increase sooner.
- Don’t ask for too much – This one is obvious… if you ask for too much and get declined, obviously you have missed your chance. But if you ask for too low of an amount, you might be turning down extra credit that you could have had. It is an obvious catch-22. A good rule of thumb is that you should ask for around 10-25% of your current credit limit.
- Make sure you pay your bills on time – It almost goes without saying that if you are consistently paying your bill late, the creditor will be less likely to increase your limit. If you help them by being a good customer, they will be more likely to help you. It is in their best interests to raise your limit, because that is just more money that you could spend with them. But if you look like you are risky at all, such as by making late payments, they won’t want to take the risk.
- Build your case – Have your case ready, with all of the positives that you can think of for why they should give you an increase. Good reasons include any increase in income you have had, a long history of paying your bill on time, the length of time that you have had the card, a low overall credit utilization, and possibly the lack of other debt in your life (if you have just finished paying anything off). If they provide any pushback, you have to be able to clearly state why they are making a wrong decision.
Have you ever increased your credit limit? Any tips to add? While it may seem like a little bit of a scary process, it really isn’t too hard once you actually do it. As with most things, the key is just taking the first step!