How to Increase Your Credit Limits

By: Jilly Pretzel

Let’s face it: increasing your credit limit can be a tricky business. You have to ask credit issuers for more cash…without sounding too desperate. It’s the old “prove you don’t need money so you can get more money” run-around, and it can be exhausting. Luckily, you’ll go to your credit issuer prepared with these four tips for getting your credit increased.

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1. Make sure you’re asking for the increase for the right reasons.

If you’re looking for an increase because you’re always maxing out your cards every month, increasing your credit probably isn’t the quick fix you’re looking for. Firstly, your issuer will see your high spending on your current limit and note that you’re not paying off your card on time, and subsequently deny your request for an increase. Second, if you do get a higher limit, and you allow your spending to increase with it, you could find yourself in more debt… and more trouble.

One “right reason” for applying for a higher limit is for the opportunity for a higher credit score and better financial security. A higher limit, and low spending, will keep your utilization (or your spending of available credit every month) low, which can really help your credit score. It’s a good rule of thumb to use 30 percent or less of your limit each month because it shows banks that you’re living well within your means and are financially responsible. Increasing your limit could help you lower your utilization and get you a better credit score, which could make you eligible for better rates when buying a home, car, or other.

2. Request an increase on one of your cards

Perhaps the most obvious way to get an increase on your credit limit is to simply ask for a higher limit on an existing credit card. Many issuers will let you make this request online, so you could get an answer ASAP.

But it’s not always that easy. Remember that banks want to give money to those who don’t necessarily need it. So, as you ask for more money, the key is to not seem desperate. Don’t call up your bank in a panic, explaining why you need the money right away. Let your credit issuer know that you simply deserve an increase and give them reasons why they can’t say no to, like:

  • You’ve been a loyal customer for years and have never missed a payment
  • You always pay at least your minimum balance (and you pay it on time!)
  • You just got a hefty raise at work
  • You always use 30 percent or less of your current limit (that’s the credit utilization we talked about above)
  • You aren’t requesting a large increase (shoot for 10 percent to 25 percent- any higher will look fishy to issuers)

Of course, if you haven’t been doing these things, it could be easy for an issuer to deny you the increase. But that doesn’t mean you can’t try again later. Work on being a model cardholder for a while, then request an increase.

Bonus tip:
Don’t call up all your issuers at once looking for an increase. You might think that more requests will mean higher odds that at least one issuer will provide a higher limit, but that’s not the best tactic. When you request an increase, your issuer pulls your credit history. Not only can issuers see when other issuers have pulled your credit history (which makes you look desperate) but each of those hard inquiries can knock 5 to 10 points off your score, making your odds of getting an increase even worse.

3. Apply for a new card with a higher limit

Sometimes the simplest option is to just get a new card. It’s usually pretty easy to apply (you can usually do it on the issuer’s website or by phone) and you could have a new card before you know it. Perhaps this new card, in addition to your old card, will provide you with the credit you’re looking for.

However, if you’re looking to keep your number of cards down, or really do want a higher limit on your existing card, you can reallocate credit from your new card to your existing card to raise the limit. Though, you’ll probably need a pretty good credit score in order to do this.

4. Wait for an Increase

If you’re not in any rush, sit back and relax because your credit limit could be rising soon anyway. Credit issuers usually review accounts twice a year and those with good behavior enjoy rewards in the form of credit limit bumps.

Show your issuer you deserve an increase by making payments on time and even paying the full balance each month. Then, don’t be surprised when your limit goes up on its own!