Do you want to have a higher credit limit on your card?
With the risks of carrying a large amount of money increasing each day, it makes sense you would want this kind of security for your finances. Increasing your limit also gives you a bigger possibility of getting a credit card cash advance, gives you a bigger spending budget, and gives you a lower credit utilization ratio.
With the benefits being this tempting, no one can blame you for trying to have your credit limit increased. How to increase credit limit though, you ask? There are certain factors you should take into consideration first.
Today, we’ve prepared a guide to help you get a credit limit increase. Read on and figure out what you need to know and do to increase the chances of getting your request approved.
1. Ask Yourself Why You Need the Limit Increase
How to increase credit limit? All you need to do is make a call! There are a few things you need to check first, though.
The first thing you should always do when considering asking for an increase is to ask this question to yourself first. A lot of people have their credit limit increased for no reason and they often regret their decision. To avoid any regret whatsoever, consider the reasons why you need a limit increase.
Come up with a small list if you can and check if your reasons warrant an increase. If your reason is to have a bigger spending budget, you should first see if what you want is affordable for you. There is no need to increase your limit if you can’t pay your credit card bill by the end of the period.
If your reason is to take advantage of the lower utilization rate, then you should go for it. Doing so is a great way to help you in your financial future. This is because the lower the rate is, the higher the credit score you get at the end of each review.
This is an effective tactic if you can control your spending impulses.
2. Check to See if Your Finances Can Handle an Increase
It’s a known fact that requesting an increase or a new card has an impact on your credit. Whether the impact on your finances is positive or not, you should think about your request first. This is because, in one way or another, your finances will suffer if you don’t handle your new limit well.
One way to check if your finances can handle it is to, once again, check your reasons. If your reason is, for example, to be able to pay a debt, then you should reconsider asking for an increase. You won’t be able to earn enough to pay back your credit debt in turn if this is the case.
This will then loop around as you’d need to take out a loan to pay your debt and use your credit to pay your loan. Make sure you’re in the clear in financial terms to avoid falling into this spiral.
3. Fix Your Credit Score
After you’ve checked your reasons and are confident in your finances, the next step is to check your credit score. This has a heavy influence on whether you’d get approved for an increase or not. Since a credit line increase is a big deal, your credit company will always check your score before anything else.
You should check on this before making the request. If you notice your score is in the low-end, then you should hold off in requesting an increase. A low credit score is a surefire way to get your request rejected in an instant.
There’s not much you can do now except raise your credit score. There are many ways for you to do so but regardless of what you do, it will take time to have a considerable difference. Often, it can take months to fix a bad credit score, but here are some ways you can raise your credit score in 30 days.
4. Gather Everything You Need to Make a Request
Next, you should gather the documents and records you need to present. To know which papers you should get, all you need to do is some quick research. Your credit company often has a list of requirements on their website.
This is a more important action to take than people realize. Doing so presents you as a responsible user and it will help your chances of getting approved. Making the request and having everything prepared will make it seem as though you’re someone who’s well-organized, an important trait in the eyes of those considering your request.
If you don’t have the needed documents and reports in the first visit, you’ll look sloppy and disorganized. Put yourself in the shoes of those you’re asking an increase from. You’d likely not approve the request of someone who isn’t capable of handling their finances, as well.
5. Know Which Credit Card is Best for You
Often, when you’re requesting an increase in your credit card limit, you’re presented with the opportunity to get a new credit card with a higher limit instead. This is often the better choice as it gives the same effect as having a higher limit but with an added benefit.
You’re now given the opportunity to request an increase on your old card. With your new credit card, the credit-utilization ratio should help improve your credit score, as mentioned above. This makes it even more possible to get approved for the increase on your old card.
When choosing a new credit card, you should consider the intro rewards first. Some cards offer a bigger cashback rate than others and this may work better for you. You can also consider what’s beyond the intro rewards and take a look at credit card rewards later on.
Choose among the cards to see which one suits you best. Doing this can give you a higher credit limit than you expected.
Also, you should avoid closing your previous credit card once you get the new one. This is a common credit mistake made by a lot of people and it can cause your credit score to drop.
6. Prepare a Compelling Case for Your Request
Preparing your case is another important step most people overlook. While it’s true you can still get approved even if you don’t prepare, winging it will often get you nowhere. Compared to that, preparing your case ensures your approval.
The reason for this is because you sound more confident if you take time to prepare. The confidence will help you convince them why an increase is in their best interests. It will also help you sell what you’re about to present to them as support.
Prepare a record of your history with your lender to show them. This will help you push for approval as long as what’s in the history is positive. Show them how you’ve been a responsible customer of theirs in the past years.
Doing so will help convince them that you’re worthy of an increase.
7. Pick the Right Time to Make the Call
Before you make your request, consider the time when you’re going to contact them. Few people know there’s a best and worst time to make requests like this.
The best time to ask for an increase would be when your credit score is at its highest. That’s not all you should consider though. You can have a high credit score and still get declined because of your latest paycheck.
The moment you get a raise is the moment you should ask for an increase. The reason for this is they’ll know your latest income will be able to cover for the increase you request.
If you experience a drop in your income though, the outcome will be the opposite. They’ll see no need or reason to increase your limit and end up rejecting your request.
8. Make the Call and Make Your Request
Now it’s time for you to make the call and request an increase. There are many ways you can get in contact with your current lenders. You can go for an online request, reach them through a landline, or meet them in person in an appointment.
Remember to be polite yet confident during the call. Present what you need to present and if all goes well, they’ll ask you how much you want.
At this moment, you should be reasonable and make a realistic offer. Go for small increases like 10% or 15% to further increase the possibility of approval.
If the conversation starts to go south, you can entice them by offering a balance transfer. This may be what turns rejection into approval.
9. Be Responsible in Using Your New Credit Limit
Getting approval doesn’t mean you can be nonchalant with your finances now. You should still try your best to stay within the utilization ratio and not go over your limit. Why do this, you ask?
To increase your limit once again, of course! Lots of credit card companies give an increase to responsible cardholders. If they see you’re responsible with your finances during a review, you can get an automatic limit increase. Not needing to constantly take out installment loans to fund your credit card will really help your case.
What happens if you go over your credit limit though? You can expect them to reconsider giving you an increase in this case. That doesn’t mean you won’t get these rewards anymore though.
If you prove to be responsible with your finances during the next review, you get that chance again.
Learn How to Increase Credit Limit Today
If you’re looking for ways on how to increase credit limit then look no further. With the help of the guide above, you’ll get approved for an increase for sure. Make your request today!
Looking for a place to get credit cards, bad credit loans, and anything else to fix your credit score? If you are, then we’re who you need to make a call to. Look up our contact information here and get in touch with us today!
Here are some other articles you might enjoy:
Let your Credit Score Work for You: Unsecured Personal Loan
Is Applying Really as Simple as 1, 2, 3? How to Acquire Easy Payday Loans
What are the Best Bad Credit Loan Lenders
Is Dental Insurance Worth It? A Complete Guide