How To Increase My Credit Card Limit
Have you ever felt your credit card didn’t have enough purchasing power? Perhaps you travel frequently for business and need to charge your expenses. Or maybe you are undergoing a home renovation or incurring other major expenses. If you suddenly find yourself with a need for more spending power, then it is probably the right time to request a credit line increase from your card issuer.
How to request an increase
There are two ways you can request a credit limit increase. First, you can contact your card issuer over the phone. When you speak to representative, you may be asked how much of an increase you need. You might also be asked to update your personal financial information such as your total household income and your monthly housing expenses. Secondly, some credit card issuers allow you to request a credit line increase online. In some cases, you will be granted your credit line increase immediately, while other times you might have to wait to receive a decision.
Tips for increasing your chances of receiving a credit line increase
As an old saying goes, banks only want to lend money to people who can prove that they don’t need it. To the extent that this saying is true, you will want to show you don’t really need a credit line increase, in order to get one. You can start by paying down as much of your existing balance as possible, before submitting your request. You should do this not only for the credit line you are requesting an increase for, but also for any other credit lines you have with the same card issuer.
Also, you’ll want to pay off as much of your outstanding debt as possible with your other card issuers. Before requesting a credit line increase, be sure to wait until your statement closes on those accounts and your new, lower balances are reported to the major consumer credit bureaus.
Another thing you can do to maximize your chances of receiving a higher credit limit is to update your reported household income. When granting a line of credit, credit card issuers are allowed to consider all household income to which the account holder has a reasonable expectation of access. This means that non-working spouses can report the income earned by their spouse, along with any other household income they can use to payback their loan. Additional sources of household income can include alimony, child support, dividends on investments, and government benefits such as Social Security. The more income you are able to legitimately include, the greater your chances of being approved for a higher credit limit on your credit card account.
If you have multiple lines of credit from the same credit card issuer, you may be able to request that a portion of one line of credit be re-allocated to a different card. Obviously, this won’t increase your total credit extended. However, it can be useful if you prefer to use a particular credit card, but don’t have a sufficient line of credit on it for all of your charges.
Other tips for getting a larger line of credit
When requesting a credit limit increase, the first thing the credit card issuer will consider is your credit history and your credit score. Therefore, you should do everything possible to have as good a credit history as you can. The most important factor in your credit score is a record of on-time payments. Next, you want to have a small debt to credit ratio. This means you use a relatively small portion of your available credit. You can also reduce your debt to credit ratio by maintaining the lines of credit that you have. It may be counterintuitive, but you shouldn’t close unnecessary or unused lines of credit, as it will reduce your total credit extended.
Another factor to keep in mind is the length of your account history. Credit card issuers are unlikely to increase your available credit on a newly issued account. Therefore, you should wait until the account has been open for at least one year before requesting a credit limit increase.
Finally, you can obtain a new line of credit by applying for a new credit card. While your existing credit card issuer may be reluctant to grant you a credit line increase on an account that was opened in the last year, a different credit card issuer may be eager to earn your business by granting you a new line of credit.
It is not hard to be extended additional credit on your credit card, so long as you know how to do it. By taking a few simple steps, you can increase your chance of being approved for the credit that you need.