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Guidelines For Obtaining A Higher Credit Limit

Triston Martin

Oct 10, 2023

The credit limit on a credit card is the maximum amount you may spend each month and is determined by the card issuer when you are authorized for the card. This limit depends on several factors, including your credit score, credit history, income, and other financial responsibilities.

Credit card companies may automatically increase your credit limit when you demonstrate responsible financial behavior. Still, you are always free to ask for an increase if you face financial difficulty. The procedure for obtaining an increase in a credit limit is simple. On the other hand, you may do a few things to increase your chances of being accepted.

Can I Raise My Credit Limit?

There's no hard and fast rule regarding how much credit you should have, although a more significant number is always preferable. Getting more credit is frequently the quickest and most straightforward approach to boost your purchasing power. When you have more available credit, you may more easily charge a significant transaction or several smaller ones.

When Can Your Credit Limit Be Raised?

There are several good opportunities to ask for a credit limit increase. When you enter employment after finishing school, you can request a greater limit from your issuer. You may become eligible for more credit if you receive a promotion or switch to a higher-paying job. Only long-term cardholders are likely to be approved for an increase. However, the exact requirements vary for each lender.

Steps To Take Before Applying for More Credit

If you have up-to-date credit profile, card issuer will have less data to verify, which might result in a faster decision. It's essential to double-check your current contact information before asking for a raise. Be honest about your work and financial situation. In addition, many credit cards will check your monthly housing expenses to ensure a credit line increase won't put you in a tight financial spot.

Does Asking For A Higher Credit Limit Affect Your Score?

Even while your credit score may drop by five to ten points while you're requesting an increase, it may be higher in the long term if you get the raise. Many issuers may make a hard inquiry, also known as a credit report refresh when you seek an increase to your credit limit. Your credit score may temporarily drop by a few points due to this investigation, but it will eventually recover.

What Advantages Does An Increased Credit Limit Possess?

A greater credit limit allows you to charge more to your card without having to switch between them often, which is especially helpful if your original limit wasn't high enough to pay your monthly bills. You may get more out of your credit card and its perks, like extended warranties and mobile phone insurance, if you use it more frequently and make more significant charges. These perks aren't often available when paying with cash or a debit card.

Utilization of Credit

Requesting a credit limit increase might be helpful even if you don't think you'll need the extra funds. With the same level of expenditure but a more extensive available credit line, your credit utilization rate will decrease. If other creditors discover that you aren't using 100% of your available credit, they may raise your credit limit.

Tips on Getting a Higher Credit Limit

You can ask for a credit line increase over the phone or submit an online form to your card issuer.

Online Application For Credit Upgrade

Requesting a credit line increase online may be quick and easy if you believe you have a compelling case. After logging into your card account, the majority of issuers will provide you the opportunity to request a credit line increase. It usually just takes a couple of mouse clicks to enter your information, and you can get an instant response.

Phone-In Credit Upgrade Request

Call your credit card company and ask to talk to a supervisor if you don't think your situation is simple. If you call in, you can give details that won't appear in the online forms. You may also find out from your issuer over the phone what kind of credit check is necessary for them to approve your request by calling and asking. The credit bureaus won't be able to see your soft queries, but any hard ones will be there for a year.

When You Exceed Your Credit Limit, What Happens?

The transaction will likely be denied if your total purchase exceeds your available credit. Of course, there are situations when an unauthorized charge pushes you over your credit limit. If this occurs, your credit card company may charge you a fee.

Bottom Line

A credit limit increase may be requested quickly and easily, but your chances of being granted depend on several criteria. Increase your chances of obtaining the entire amount you seek by being a responsible cardholder and making the request at the appropriate time.

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