A credit card it is a tool for timely access to goods and services that we could not otherwise have. It is common for any cardholder to wonder how to increase the limit my credit card. Here we tell you.
get to increase the credit card limit It feels a bit like getting a promotion or a raise at your job. While not exactly as monumental, it’s still a great time in your credit life, especially if you’re new to credit or rebuilding a bad credit score.
And it is simply that a credit limit increase feels like a thumbs up, letting you know that you’ve been responsible with managing your credit card.
According to the channel CNBC, In 2019, Americans had an average of $22,751 in available credit across all of their credit cards. Are you below average? Then it’s time for you to consider how to increase credit card limit.
Why is a credit limit increase so important?
First of all, a higher credit limit increase your purchasing power as it allows you to make larger purchases conveniently, as well as have access to promotions and loyalty programs. But that is not the only advantage if you receive a increase in the limit or card quota.
A higher credit limit can mean good things for your credit score, as long as you don’t go on a shopping spree and use your newly available credit all at once.
The Consumer Financial Protection Bureau (CFPB or Consumer Financial Protection Bureau) explains that a credit utilization ratio 30 percent or less shows lenders that you are a responsible person with the management of your finances and therefore someone of low risk.
So an increase in the credit limit will reduce your use of credit, as long as you maintain the same balance or pay it off. The result translates into a higher credit score that will make it easier to obtain credit or larger loans.
Investopedia.com explains at least four other additional benefits of increase the credit limit.
Here’s how to get a credit limit increase and how to increase your credit score in the process.
Automatic credit limit increase
Some credit card issuers automatically increase your credit limit as you manage credit responsibly.
A practice that involves using a manageable percentage of your total credit limit and making payments in full or above the minimum on time each month.
Many credit card issuers review accounts periodically, in most cases every 90 to 180 days, and automatically increase the credit limit of cardholders who meet their usage and payment criteria.
How to request an increase from your card issuer?
While some credit card issuers automatically increase your credit limit, others will only increase it if you ask.
To start the process, call the toll free number on the back of your card or on your monthly bill and listen to the prompts, there may be a direct option to request a credit limit increase.
If not, choose the option to speak to a customer service representative and request a credit limit increase.
Some credit card issuers allow you to request a credit limit increase from your online banking account or mobile app. Sign in and look for a menu option to request a credit limit increase.
Your card issuer may require additional information from you in order to process your request.
For example, being asked for proof of your monthly income, bank statements, a form with the credit limit increase you are requesting and a statement of the reason for the increase.
Hard & soft inquiry
To process your request, the credit card issuer may access your credit report through a “hard pull/hard review.”
Depending on the credit card issuer, the review of your report can be “hard or soft”.
A review gentle it is an inquiry that will not affect your credit score; These are the types of queries that only appear in your version of credit report. However, a “hard pull” can affect your credit score depending on the information previously contained in your report and if they carry out several “harsh reviews” in short periods of time.
The “hard inquiry” will appear on all versions of your credit report for up to two years.
If you have accumulated a lot of debt elsewhere, such as student loans, car loans, or home mortgages, you can wait to apply for a credit line increase until some good portion of the debt is paid off.
If you are concerned about adding hard inquiries to your credit report, ask your card issuer if they will do a soft or hard credit check before proceeding with the limit increase request.
Increase your security deposit
The best option to increase the limit of a secured credit card is to call the card’s customer service number to find out the exact steps to follow; because each emitter is different.
Why can I be denied the increase in the limit of my credit card?
If your account is current, free of recent arrears, and has enough income to support a credit line increase, you can find out immediately if your application has been approved.
If not, the card issuer will notify you of the decision a few days later, usually by email.
Your credit limit increase can be denied for a number of different reasons.
- Your account may be too new.
- It may be too soon since the last increase in your credit limit.
- Your verifiable income may be too low to qualify for a raise.
- Your credit utilization ratio is too high.
- You have incurred arrears with your payments.
- You appeal too much for the minimum payment.
Or you may have an account that doesn’t receive credit limit increases, such as a secured credit card account.
In addition, negative information in your credit history can cause your credit limit increase request to be denied.. In that case, you’ll receive a communication from the issuer explaining the factors, which could include recent delinquencies or high credit card balances.
You’ll also get a free copy of your credit report and score if it was a factor in the decision to deny your application.
If your credit limit increase request is not approved this time, make a note of the reasons listed in the adverse action letter. Improve your credit in those areas, wait a few months, and then try again.
Beware of credit limit increase rates
Keep in mind that some credit cards charge a fee to increase your credit limit.
Credit One Bank’s Platinum Visa credit card, for example, can charge up to $49 when you ask for a credit limit increase.
And the First Premier Bankcard charges 25 percent of the increase, each time a credit limit increase is approved.
It is worth saying that both cards are aimed at people with poor credit records. If you have one of these or a similar card, forgo asking for a credit limit increase and instead apply for a credit card with lower fees if it’s within your means.