If you’re looking to bump up your purchasing power, it starts with increasing your credit limit. Whether it involves patience or a bit of persistence, you have options. Here are the top ways to increase your credit limit.
Ways To Increase Your Credit Limit
Use your card regularly, and pay it off on time.
Not only is this the best way to boost your credit score, it’s also one of the top ways to increase your credit limit. This way, your credit card issuer will see you have been using your card responsibly and paying off your card balance for each cycle with cash. It’s best to be conservative when requesting a limit increase, because your issuer will usually decide based on your credit and what type of a line increase you request. Don’t ask or expect for a doubling to your credit limit; try to stay between a 10-25% increase. If you ask for too much and get rejected from an increase, you may need to wait at least two or three months before requesting another increase.
Don’t ask too quickly for too much of a limit increase.
This could raise a red flag and you might be denied a credit limit increase. Most credit card companies automatically review your credit after about six months of card membership. If this doesn’t occur, you can call to request a limit increase—but don’t do it within six months of getting a new credit card.
Be patient for an automatic credit limit increase.
Issuers periodically review accounts to see whether customers should receive a limit increase. If you’re deemed eligible, your credit limit will automatically be boosted. The best way to get an automatic increase is to make sure your account has relatively low credit limits. The higher your limit, the less likely it is that your credit issuer will increase it for you.
If you have multiple cards, only request an increase on your best card.
Never request limit increases for all of your credit cards. When you ask for a limit increase, the issuer pulls your credit report. That inquiry in itself can cause a temporary dip in your credit score. Also, if credit card companies notice multiple hits on your report from other card issuers, it could signal a red flag of you being desperate for money. A nervous issuer, as a result, will be less likely to boost your limit.
Explain your reasoning for wanting a higher limit.
State your case. Remind the card issuer that you’ve been a longtime, loyal customer. Show them your strong payment history, and show that you take responsibility with your credit card. Has your household income recently increased? Make sure you mention that, too, as well as the logical reason for requesting more credit. Perhaps you travel frequently, or you’re hoping to start paying more bills with a credit card. You might even be looking to earn rewards for purchases—whatever the reason(s), make sure to lay out your case.
Cautiously transfer credit card limits.
Use this method with caution; it’s more tedious and could potentially negatively impact your credit score. Many credit card issuers let card holders transfer some of a card’s limit to another credit account, so long as both cards derive from the same issuer. For example, if you have two different Bank of America cards (each with a $2,000 spending limit), you can transfer $1,000 from one card’s credit limit to the other account. However, if you choose to close the new card not long after moving over the spending limit, it will probably damage your credit score.
What tips do you have for ways to increase your credit limit? Let us know!
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