Saturday, 23 May 2020

How To Increase Your Credit Limit (Easy Step)

How To Increase Your Credit Limit

You are interested in increasing the credit limit on your credit card, I do not know why maybe you want to increase that credit score, maybe you want to flex on all your friends, or maybe you just want to have a higher limit because you have a big purchase coming up. Regardless of whatever the reason may be, what we are going to do in this article is to show you exactly how you can increase your credit limit


What Is Credit Limit Increase

let's talk more about what the credit limit is and exactly why this is beneficial in doing.

Basically, your credit line or your credit limit is exactly how much you can spend until you have to pay off that balance before you can spend that amount even more again. It is the limit or the cap that you can spend, but credit card issuers and your credit score are determined by how much you use up that limit. If you only have a $500 limit that some people do, particularly college students or people who have a very low credit score, if you buy $250 item maybe some shoes, you can find yourself using up that limit way too fast, not only is it an inconvenience but in some cases, it does hurt your credit score. So people naturally want to get credit limit increases because it does help in. I am not saying get a credit limit increase because you can spend more money that you are not going to pay off. That is not the idea.

The whole idea of getting a credit limit increase is the principal, that you will use your credit cards responsibly paid off in full and this article is just going to be the guide that shows you exactly how you can get that higher limit.

Let's get started


Increases Your Limit By Doing Nothing

This is probably the hardest method but one of the most effective is by doing nothing. that's right, you heard me, do nothing. Pay off your credit cards on time by setting up automatic payments, but once your credit card is getting paid off automatically you will find that your credit limit naturally increases. A lot of people want to request one, and we will go into the techniques on how you can do that, but if you use your credit cards and do not do anything at all you just use it responsibly, they will naturally increase your credit limit over time. All you need to do is to demonstrate that you are a responsible cardholder, that they can trust you with the higher credit limit because the last thing that these banks want is to rid of people to have a $10,000 to $20,000 credit limit, but not be able to ever payback and the banks are the ones that are losing the money.

If you are someone who already has a very good score, you have a good history and you are using that card a lot, it is only natural, it is only within the time the bank will give you a higher credit limit increase.


Request A Credit Limit Increase

This is done a couple ways. To request a credit limit increase you can do this three different ways

  1. Call Them
  2. Send Them a Letter In The mail
  3. Do It Online

My favorite way is to do it online, if they do not have an option to do that because it depends on whatever issue you go with, then you want to resort to calling them, and then you can resort by going to snail mail. Those are the three options.

When we are talking about a company for example, like the American Express, they have an option available where you can just request one automatically online


Generally, you are going to get a soft pull for these credit limit increases, but it is going to be dependent on your profile and that credit card issuers. If you are afraid that you are going to get a hard pull for whatever reason, I would contact them prior to that and ask them hey, I am looking to get a credit limit increase, but I want to make sure it is a soft pull. We have talked a bunch on our site why hard polls are not that bad for you, they are not negative, they are only going to temporarily reduce your score. A hard pull, a utilization, where someone goes into your credit report take something out, that will reduce your score, but it is temporary, it is not going to kill you. If you think you need a credit limit increase, in my opinion, that hard pull will be worth that trade-off depending on the situation that you are in.

If you are someone who's looking to decrease that utilization and you know that if you get a higher credit limit your score will go up, those are instances where that hard poll will not matter because you are doing something for a higher purpose, that outweighs that hard pull that is only temporary.

When you submit a credit limit increase three things will happen.

  1. Automatic Approval On CLI
  2. Counter Offer On CLI
  3. Automatic Denial. No Reconsideration

If you apply for a new credit card, you either get accepted or denied, you usually do not get a counteroffer, but this is something that card issuers tend to do because they want to give you the credit limit increase but, sometimes they are not comfortable giving you the full amount. The third thing that could happen is that they could just straight-up deny you. This does happen from time to time but if they do deny you, the great thing that happens is that they tell you why. It is like getting rejected by a female.

If you do get rejected the best thing that usually happens is for you to understand why so you can make a change in that game plan. Once you understand exactly why you are getting rejected I think you can make a better play after that, maybe I got to work on my credit score a little bit, maybe I just need to develop a longer a bit of trust with the credit cards, you improve one of those and you will find yourself getting success at the end of the day.

I did mention that you can get a credit limit increase over the phone, to do this, you usually have to provide a lot more details.



  • Address and Social Security Number
  • Current employment status
  • Total monthly and annual gross income
  • Monthly mortgage or rental payments
  • Amount of requested credit limit increase

I have had instances where I have applied and this happened to my uber Barclays card with Visa, I applied for a credit limit increase it was pending or they denied it but then I got a follow-up call and the lady manually approved it. Usually, the algorithm will just make the decision for you, but if you talk to someone live on the phone they have the ability to reverse a decision or just to keep it the way it is, but it is worth giving it a shot than to allow yourself to get a decision based on some type of algorithm that does not know what your current situation is.


How Large Of A Credit Limit Increase Should You Request?

There is no one-size-fits-all type of answer, this depends on how much of a credit limit you have already, how much money you are making, what your history is, and how much you want to get. There are certain data points and rules depending on the issuer, for the most part, if you get a card like a business credit card, you will find that they will generously increase that credit limit to as much as you want. I think the cap usually would be $30,000 to $50,000, I have even had friends who have gone credit limits of $75,000 because it is a business credit card. But it depends on your situation.

There are issuers like American Express who have set guidelines, you could triple your credit limit with American Express this is a data point that has been around for years and years, you can triple your credit limit with American Express if you wait 61 days after you apply for a new card. Other rules apply with different issuers, but if you have like a Bank of America card or if you have a Citi card, what I would recommend you to do first is to just Google "what is the credit limit increase I could get" or even ask a representative on the phone exactly how much you think you could get away with.



Conclusion

That is how you can increase your credit limit, one, it is natural it is organically, it is automatically without you having to do anything, you may get a letter randomly in the mail saying that they increase your credit limit you did not do anything that is one option. the second one is to manually requested, that is the way a lot of people have done it, those are really the two ways you can do it.

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