Are you looking for a higher credit card limit? Cardholders will often need a larger line of credit in order to cover new purchases, and even their daily expenses. Yet the process of requesting and receiving a higher credit limit is shrouded in mystery. Before granting you a higher limit, card issuers are looking for a strong track record of on time payments, low debt levels, and a great credit score.
Here are five techniques to try that will virtually guarantee a higher credit limit.
1. Pay Down Your Debts
As the saying goes, banks only like to lend money to people who don't need it. So the best way to convince your card issuer to raise your credit limit is to show that you have a very low level of debt. So before you need to use your credit limit, make as large a payment as possible to reduce your balances on all your cards, especially the one that you are asking for an increase on.
2. Refrain from Making Other New Applications for New Credit
Another important tip for getting a credit line increase is to avoid applying for new credit cards and other lines of credit. Just as you wouldn't want to extend credit to someone who has been asking everyone that you know for a loan, neither do card issuers. In fact, the FICO scoring formula interprets multiple requests for new credit as a sign of potential financial trouble. Furthermore, opening up new lines of credit will also make it less likely that you will be able to increase your existing credit card limit. Finally, opening new accounts will also reduce the average age of your accounts, which can also lower your credit score.
3. Maximize Your Credit Score
The higher your credit score, the more likely your card issuer will be to grant your request for a larger line of credit. So in addition to lowering the amounts you owe on your credit card accounts, having a perfect payment history is vital to having excellent credit.
Unfortunately, one of the reasons why credit limit increases are declined is that they are made too soon. Credit card issuers are unlikely to grant a credit limit increase within six months of account opening. Furthermore, those who have had trouble with their credit in the past will find that it improves over time, provided that they continue to make all of their payments on time and keep low levels of debt. Work at improving your credit score to increase your chances of getting an increased credit card limit.
5. Call Your Card Issuer
The final step to securing a credit limit increase is to contact your card issuer and request it. The representative you speak to may ask you for the reason you need to raise your credit card limit, so you should be prepared to answer that question. You may also be asked how much of a credit limit increase you would like, and it's important not to ask for too much. Also, if you have multiple accounts with the same card issuer, and it's reluctant to grant you additional credit, you could simply ask to have your existing credit lines reallocated to the card you use the most. This will not give you any more total purchasing power, but it will allow you to use a single card for larger purchases. Finally, you can always indicate that you would prefer a credit line increase, but you are willing to take your business elsewhere if your current card issuer is unable to do so.
By combining these five strategies, you're credit limit has a good chance of being increased.