1. Check If Your Credit Limit Was Increased Automatically
Some lenders may increase your credit limit automatically if you meet certain requirements. You may qualify for an automatic increase depending on a few factors. These include your repayment history, current credit score, spending, and how long your account has been open. You should receive a notification informing you about the increase in your credit limit. Check your credit card account to view your current credit limit. If it hasn’t changed, consider submitting a request to increase the credit limit on your credit card.
2. Request Your Card Issuer To Increase Your Credit Limit
It’s easy to submit an application to your lender requestion them to increase your credit limit.
Many banks, credit unions, and lenders have this form online on their websites. You will have to log into your account using your credit card number to access this form. Make sure to fill the form completely with your updated income information or other financial details that the form asks for.
If there’s no online form, call the number on the back of your card. They will help you out.
It’s important to know that requesting an increase doesn’t guarantee that your lender will readily increase your credit. Along with the application, you must write a letter highlighting why you qualify for an increase. Tell them you’ve been paying your bills in full and on time every month. Submit documentation showing them your income has increased. The lender will view your request more favorably if you meet these two criteria.
Before making the final decision, however, the lender will check your credit history. If all looks good, they will approve your request to increase the credit limit on your card.
Important note: If you’re planning on requesting an increase in credit limit, be careful not to apply for a new credit card during that time. A new credit card application at this time will damage your credit score, lowering your chances of getting your request approved.
3. Apply for a New Credit Card
If your credit card lender denies your request for an increased limit, you may want to apply for a new credit card. This can be a better option in general as credit card companies tend to offer introductory periods with 0% APR or low transfer fees. This could be to your advantage.
However, if poor credit or a poor repayment history kept you from getting a credit increase, you’d likely find it difficult to get approved for a new card, too.
Should You Request An Increase In Credit Limit?
A higher credit limit is not the best option for everyone. Before you request that credit limit increase, it’s important to determine whether or not it’s the right decision for your finances.
If you have a hard time keeping up with your payments, a higher credit limit could simply get you in more debt and trouble. With more money at your disposal, it can be tempting to overspend. Unfortunately, if you can’t afford to pay back the bill by the due date, you’ll end up paying late payment fees and interest on the outstanding. In addition to pushing you further into debt, this will damage your credit score too. Go over your budget carefully before making this decision.
On the other hand, if you’re responsible with your money and make payments punctually, opting for a higher credit limit can be beneficial. A higher credit limit will lower your credit utilization. This in turn can help to increase your credit score!
Using your credit card responsibly is key to increasing your credit limit. This involves paying off the outstanding on your bill on time every time and keeping your credit utilization ratio low, preferably below 30%.
You can compare your personalized rates with our lending partners and potentially lower your monthly student loan payments and save money.