How Do You Ask For a Credit Card Limit Increase?

by : Jamie Jefferson



Depending on the way you handle your credit card spending, many banks will automatically give you a higher credit card limit after a specified period of time. Some review their credit card holders' accounts on an annual or semi-annual basis and, based on the criteria they specify, may increase limits for certain customers.

If you don't want to wait for an automatic increase, your credit score is good, and you always pay on time, you may be able to increase your limit simply by calling and asking for it. You may be asked to fill out an application for increased credit first. If your request is declined, you can also consider the option of applying for a new credit card with another bank.

The most important thing you can do to get a higher credit card limit is to prove to the bank that you are worthy of an increase. They want to know that you are stable financially and will be able to pay back an increased amount. Here are four tips to help increase your chances of being approved for a credit limit increase by showing what a good borrower you are.

1. Paying on time is one the best ways to increase your chances of getting a higher credit card limit. By paying more than the minimum balance each month, not only do you save on finance charges, but you also put yourself in a good position for becoming eligible for an increase. It's even better if you can pay off the entire balance each month.

2. Stay within your limit. Most credit cards charge a hefty fee for over-the-limit spending. By staying within established credit limits, you are showing you have control over your spending. This reinforces to the bank that you are a good credit risk.

3. Use your card regularly (and not just for emergencies.) If your card is rarely used, it's harder for the bank to get a good picture of your spending and repayment habits. The bank will be more reluctant to increase your credit limit if the card is not used on a regular basis. Of course, you want to spend only within your means. You aren't doing yourself any favors by burying yourself in credit card debt.

4. Don't assume your credit limit will be automatically increased. Many banks do raise credit limits and some don't. If you are taking all the steps listed above, you can call your bank or credit card company and personally ask for an increase. If you have an online account for your credit card, you can also look for a button or link once you log in that will allow you to request a credit line increase.

Keep in mind that with increased limits, it's easy to fall into the trap of increased spending. Be sure you can pay back what you're asking to borrow. Another thing to keep in mind: some people say that calling your bank to ask for a credit card limit increase may actually have a negative effect on your credit score (depending on your other credit risk factors) so make sure to weigh the potential disadvantages against your need to have a higher credit limit

Getting a higher credit card limit has advantages, even if you don't use the full amount. Your ability to buy is greater and there's peace of mind in the knowledge that you have an extra cushion in the event of an emergency. It can also improve your credit rating, particularly if you keep the amount that you owe on the card low (or pay it off each month). Other credit card companies will see that you are a good borrower and that you keep your spending under control.

The bottom line is this: Responsibly using the credit you already have and consistently meeting your current financial obligations is the best way of getting a higher credit card limit in the future.