How to Increase Credit Limit with Some Easy Steps in 2023!
If you are wondering how to increase credit limit, this is your chance to do so. How much credit your credit card issuer allows you to borrow before you pay off some balance is what your credit limit is. There are several factors your credit limit depends on, including your income level, credit history, or the policies of your credit card issuer.
Sometimes, your credit card company might decide to increase your credit limit without you requesting it and surprise you, but that doesn’t happen too often. You should also be aware that your credit card company has the power to reduce your credit limit if they think your spending habits are risky.
So, here’s a full guide to “How to Increase Credit Limit.”
Why is Your Credit Limit Low on a Credit Card?
There are various reasons why you might be offered a low-limit credit card. You can examine your credit report and try to find the reasons why. You can also request more information about the lender’s decision.
Your credit limit is usually decided by the card issuer only after you apply for it. Your credit report, income level, and credit history play a major role in the decision.
Here are some of the reasons why your credit limit is low:
- The balances of your other credit cards are high.
- Your credit history is poor
- Your income level is below the expectation.
How to Increase Credit Limit: 4 best ways
1. How to increase credit limit by requesting an Online:
There are many credit card companies that allow a cardholder to make an online request for a higher credit limit for their credit card. Sign in to your account and select the request submission option. You should update your income details. The higher your income is the greater the chance of your credit limit increasing due to the high financial security.
2. How to increase credit limit by calling the card issuer:
There must be a number of card issuer customer service numbers given on the back of your credit card. Call the customer care representative and ask them if you are eligible for an increase in your credit limit. You will be asked for the request and your recent raise in income.
3. How to increase credit limit automatically:
You have the chance of getting an automatic increase in your credit limit if you have been using your card responsibly for a long time.
4. How to increase credit limit by applying for a new card:
If you have been making payments on time and with the credit line you already have, and if you are keeping your credit in good shape, you can get a new higher credit limit credit card. You don’t have to be disappointed even if your new credit card doesn’t have higher credit limits as getting a new card will increase your overall credit available.
Know When You Should Ask For An Increase In Your Credit Limit
1. If you got a raise recently:
Your income is one of the major deciding factors when it comes to anything related to credit because your card issuer will want to see if you can manage to pay off your credit card expenses. Note: You need to provide proof of your new income to get approved for a higher credit limit.
2. If you have good credit:
If you know your credit score is good, you have a higher chance of getting approved for an increase in credit limit by your credit card issuers. A good credit score makes the card issuer believe that you are a responsible borrower. Therefore, you will make payments on time and also understand how much you can afford to pay each month.
There are some trusted websites where you can check your credit score for free like Experian. Good financial health and good credit scores are not the same, but to the creditors, both qualities are linked.
3. If you have a good track record:
Having a good track record includes making on-time payments, and never utilizing the full credit limit. These things increase your chance of getting a higher credit limit approval. You will be seen as financially having trouble if your track record has late payments and high credit utilization. You have a better chance if your account has been open for a longer time with the particular creditor like 6 months to one year.
Know When You Should Not Ask For a Credit Limit Increase
1. If you have recently applied for a new credit card or asked for a credit limit increase somewhere:
Many credit requests can be seen as a sign of financial distress. So, if you apply for a new credit card, and ask for an increase in limit at the same time, your credit report will undergo a hard inquiry which can hurt your credit, especially if you don’t have a very long credit history.
2. If you have a lower-paying job than before:
If you have recently got a low-paying job, it is not the right time to ask for an increased credit limit. According to the card issuer, your spending capability has decreased, so there is no reason to extend your limit.
3. If your credit is uncertain:
How to increase credit limit if you know your credit score is not excellent or good? Well, it is better not to ask for a credit limit increase. It is likely that you will not get approved because a low score means you have missed or late payments. You have to build your credit score before requesting a credit limit increase.
4. If you are planning an overseas trip:
You will be suspected of fraud on a credit card if you apply for a credit increase. When you travel overseas there is a higher chance that you will spend more than you normally would due to the travel fees and your lack of financial inhibitions. Increasing your limit makes you overspend and you will have to pay the bill eventually. Wait till you return home to get a request for a credit limit.
Frequently Asked Questions
- How do you get a higher credit limit?
- Pay your bills on time
- Pay off the due fully
- Keep updating your income as per the credit card company’s website
- Keep your credit account open for at least a year or 6 months
- Keep your credit utilization ratio low
- How long does it take to increase the credit limit?
The approval or rejection of the request for your credit limit increase can be instant. Wait for at least another 6 months before trying again if your request gets denied.
- Why is my credit limit so low?
If you have been issued a credit card with a low credit limit, there can be a number of reasons, including having a poor credit history, other credit cards with high balances, and low income.
How to increase credit limit without affecting your credit score? Well, it can be a little tricky. Oftentimes, requesting a credit limit increase can trigger a hard inquiry of your credit report, which can directly affect your hard-earned credit score if you don’t have a long history of credit. You can ask your credit card issuer beforehand whether your credit report will go through a hard inquiry if you apply for a credit limit increase. If so, you can ask for a smaller increase in the limit and save your score.
Make sure to give lots of thought before applying for a higher credit card limit. Either call your card company’s customer service or submit a credit limit increase online, whichever works for you. Keep in mind to not get discouraged if your request gets denied. You have a higher chance of getting an increase in the future if you maintain good credit scores.
If you need help with increasing your credit score, or anything related to your credit, reach out to The Credit Pros immediately for quick and practical solutions.