A credit card limit is the highest amount you can spend on your credit card for a certain amount of time, and you may be wondering how you can increase it. You definitely should not go over this limit because it will greatly impact your credit score, along with many other drawbacks.
Additionally, your credit limit is important to keep track of because it is a large factor in determining your utilization ratio– the amount of credit that is used versus the amount available to the borrower. Be sure to keep reading to learn how to increase your credit limit.
 |
 |
How to Increase Your Credit Limit
There are many reasons why you might want to raise your credit limit. For instance, if your limit is higher, your utilization ratio might decrease, which will in turn increase your credit score. However, you must be sure you don’t spend up to your new limit. Furthermore, having a higher credit limit is helpful when you have an unforeseen large expense.
In order to increase your credit limit, you can ask your credit card company how to do so, whether it be online or on the phone. They might require you to tell them some information, like how much money you make, your monthly housing status, and the amount of credit limit you are looking for. Once you provide this information, they will most likely get a credit report, or some might even let you know the decision right then and there.
Tips to Increase Your Credit Limit
Find out how much credit you need
In order to see how much you need to raise your credit limit to, you should calculate how much money you spend on an everyday basis. It is important that you are able to pay for the total amount every month. You should not increase your credit limit if you find that you usually purchase more than you earn.
Maintain a Clean Credit Record
If you are consistently going over your credit limit or not paying on time, a credit card issuer will not be inclined to raise your limit. A general rule is to have a clean record for at least six months to increase your chances of getting approved.
Think Carefully Before You Request a Credit Limit Increase
You should not ask to increase your credit limit randomly because there is a chance that a credit card report will be pulled, which may negatively impact your credit score. So, it is important that you are sure that you want a credit limit increase before you ask for one.
Request to Raise Your Lowest Credit Limit
Raising your lowest credit limit is a smarter move instead of raising your already high credit limits. This will decrease your utilization ratio. As a result, your credit score might increase.
Don’t Request a Large Increase
Some banks require you to state how much total credit you are looking for, however, other banks choose the amount for you once you’re approved. If the increase you get is not enough for you, you can request for another increase in about a year. Just make sure you have been using your card responsibly.
Request for Temporary Credit Limit Increase
Asking for a temporary credit limit increase may be a smart move if you think the issuer will deny your application. In some cases, you will be able to ask for a temporary credit limit increase if you need it to pay for a medical expense. However, this increase will only be temporary and you might have a limited time to pay for the debt.
Author’s Verdict
Hopefully this post has helped you learn how to increase your credit limit and tips on how to achieve it. Additionally, make sure to always pay your statement in full and on time to maintain a good credit score.
In addition, we have a list of bank promotions to get some extra cash in your pockets today. You may also want to check out savings accounts if you want to get started on saving up money.
