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Sometimes your credit card issuer will automatically increase your credit limit. If that doesn’t happen, you can request a higher credit limit, but it may come with a hard inquiry. See details and instructions on how to request a limit increase from major issuers.
Ever heard of a credit limit?
Also known as a credit line, a credit limit is the maximum amount of money you can spend before you need to pay off some of your credit card’s balance. It can range from a few hundred dollars to tens of thousands of dollars, depending on the credit card and user.
Your credit limits matter more than you think, and not just because they affect how much you can spend. More importantly, your credit limits matter because of the effect they can have on your credit scores.
Read on to discover how increasing your credit limit might improve your credit score. We’ll also reveal strategies that might help you qualify for a credit limit increase, no matter the credit card company.
When lenders consider your creditworthiness, they look at one or more of your credit reports and scores from the three major credit bureaus: Experian, Equifax, and TransUnion. Your credit limits can play a big role in your credit scores.
It’s critical to pay all your bills on time. Yet your credit utilization ratio, aka the percentage of available credit that you use on credit cards, is another huge factor in your credit scores. Lower credit utilization is generally better for credit scores.
To demonstrate how credit utilization works, let’s look at the following scenarios:
How can Harry catch up? Of course, paying down his credit card balance is a great move. Doing so could potentially both lower his credit utilization ratio and save him money on interest. But if Harry can’t afford to pay off his credit card balance, there is another way to lower his credit utilization ratio as well. He can either apply for a new credit card, or he can request an increased credit line with his current credit card.
In this article, we’ll go over both strategies for reducing your credit utilization. We will also explore the second approach, asking for a credit limit increase, in detail. We like the credit limit increase strategy because it allows you the chance to lower your credit utilization even if you don’t have the funds to pay off your credit card balance at the moment. And lowering your utilization, no matter how you accomplish that goal, has the potential to improve your credit scores.
Before diving in, we want to share a few words of caution:
Finally, if you haven’t yet established credit history, none of this really matters. Start by building good credit scores from the ground up.
Confused about all the numbers on your credit card bill, like your available credit, minimum due, and statement balance? Read our guide to paying credit card bills to become an expert.
Ready to increase your credit limit? There are two basic strategies: a slow way and a fast way. We’ll explain both below.
Many credit card companies increase your credit limit automatically, without you having to lift a finger.
If you demonstrate that you’re a responsible credit card user, and use the card enough to warrant a credit limit increase, you could get a higher credit line as frequently as every 6 or 12 months.
You can increase your odds of getting an automatic credit limit increase by:
Luckily, automatic increases won’t generate a hard inquiry on your credit report, as you must agree to those beforehand.
Don’t want to wait for your card issuer to increase your credit limit (or not) on its own? Here’s some information you might not know. You can contact your credit card issuer directly to request a higher credit line.
Requesting a credit limit increase runs the gamut from super simple to involving a little bit of legwork. Bank of America, for example, includes a request link in your online account. Chase, on the other hand, requires you to call customer service to initiate a request.
(For instructions on requesting increases with specific credit card companies, see the list below.)
Before you contact your card issuer, however, note that a credit card limit increase request often results in a hard inquiry on your credit reports. After all, the issuer is considering you for a larger line of credit. So, the process is similar to applying for a credit card.
Although a hard inquiry might lower your credit scores slightly (though not always), any negative effect is often outweighed in the long run by the benefits of a higher credit limit. (Remember that credit utilization ratio we discussed earlier?) Also, hard inquiries will only affect your FICO credit scores for one year. After two years, the hard inquiries will disappear from your credit reports, too.
Are you looking for a high credit limit to help lower your overall credit utilization ratio? If so, you might want to consider opening a new credit card instead. A new account will likely give you more available credit.You can also take advantage of any introductory bonuses offered by the card issuer.
When you submit a request for a credit limit increase, your card issuer might ask for your annual income or monthly housing payment. It can use that information to help evaluate your risk as a borrower.
Then, your issuer will make one of three decisions:
In the case of a denial, you’ll usually have to wait a while before trying again. In the meantime, make sure you keep your payment history spotless and continue to use the card often and responsibly. If you really want to improve your credit utilization ratio, you can also try applying for a new card.
When you’re ready to request a credit limit increase, your online account should be your first stop. While every card issuer is different, you may be able to follow these basic steps to make your request.
Depending on your card issuer and request, you could be approved or denied immediately. For larger increases, it could take several days to process your request. If you card issuer needs time to process your request, it will notify you of its decision either through an online message or mailed letter.
If you can’t request an increase online (or would prefer to plead your case over the phone), prepare to share the following information with the customer service representative:
Most importantly, you may need to outline why you deserve a high limit. (The fact you take your grandma to dinner every week is nice, but probably won’t work in this situation.)
Qualifying reasons could include a history of on-time payments, frequent use of the card, an improved credit score, an increase in income, or plans to make a balance transfer to the account.
Once you have all of your information together, it’s time to make the call.
There’s no one-size-fits-all answer to how much of a credit limit increase you should request.
One factor to consider is that the representative may only be able to increase your credit limit a small amount based only on your account history. Larger credit limit increases, on the other hand, will likely require a hard inquiry on your credit report.
If you’re comfortable with a hard inquiry, you might want to start by requesting a credit limit that’s twice the size of your current credit line. If you’re denied instead of receiving a counteroffer, you may have requested too much for that particular credit card company and your current credit level. Next time, try requesting a lower amount.
You should also think about your personal spending habits. What size credit limit can you handle responsibly?
Do you often maintain a credit card balance? If so, you might not want to request a credit limit increase at all. Instead, it may be better to focus on paying your bill in full each month. If an increased credit line is going to lead to increased charges — and higher interest and minimum payments — it’s certainly not worth it.
Great question! But, unfortunately, this is another one of those “it depends” situations. (Womp womp.)
The more credit limit requests you make, the more hard inquiries end up on your credit reports. If you have a lot of credit cards, these inquiries could bring your credit scores down in the short term. They could also prevent you from opening new cards, as some issuers deny applicants who’ve had more than a certain number of inquiries in the past two years.
That being said, if you successfully negotiate higher limits on several cards, your credit utilization ratio should go down and your credit score may go up. Any hard inquiries that you did agree to will fall off your credit reports after two years. If you have a few well-used cards with low limits, this approach might be a good start.
The alternative tactic is to request increases for your cards one at a time, perhaps once every few months.
With this tactic, you may build your credit limits over time and space out the hard inquiries. Your credit limits may increase more slowly than with the first method, but the immediate negative impact on your credit scores could potentially be less severe.
In the end you will need to evaluate the pros and cons and choose the approach that works best for your situation.
If you get denied for a credit limit increase, don’t give up. Another strategy you can try is to apply for a new credit card from the same issuer and, if approved, transfer a portion of your new credit line to your original credit car
To transfer your new credit line to the original card, you’ll need to contact customer service. Depending on the issuer, your credit limit transfer may be approved immediately or you may need to wait days or weeks.
If you already have two credit cards from the same issuer, you can ask to move a portion of your credit line from one card to another.
Imagine you have two Chase cards — one with a $10,000 limit and another with a $20,000 limit. You could ask to transfer $5,000 of your credit line from the second card to the first card, giving both cards a credit limit of $15,000. Since you’re not applying for more credit, and instead are just asking to move your current credit around, you may have better luck with this route.
Keep in mind that moving a portion of your credit line from one card to another won’t lower your aggregate or overall credit utilization ratio. However, it could potentially lower your utilization ratio on one account.
Now that you have a broad overview of this strategy, it’s time to get into the nitty gritty of each credit card issuer.
While we can’t predict the future, the following list will give you a good idea of what to expect when you request a credit limit increase from these companies. Note that in most cases, you should prepare for a hard inquiry.
We’ve also included instructions for increasing your credit limit online. If your experience differs from what we’ve written, please let us know!
A study recently published by TransUnion had some interesting findings. It found that, in 2016, credit limit increases were 50% more likely in the first part of the year, from January to May. And credit limit decreases occurred at twice the normal rate in January, compared to the rest of the year.
Besides paying off debt, increasing your credit limit is one of the quickest and easiest ways to improve your credit score. If you don’t want to wait for your credit card issuer to make the first move, try the strategies above (and let us know how it goes!).
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