- Ask for a higher limit after a pay raise.
- Good credit and payment history helps your chances.
- Beware of “hard pull” on your credit report.
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If you want to lower your credit utilization or increase your buying power, you may want to ask your credit card issuer for a credit line increase. It’s a matter of timing. Here’s what you need to know about when you should and shouldn’t ask for a credit limit increase, based on when you’re most likely to be approved for one.
The right time to ask for a credit limit increase
When you’ve recently gotten a raise. An increase in income means you’ll be able to cover an increase in credit card expenses. Note: You may need to provide proof of your new income to get approved for a higher credit limit.
When your credit is good. A good credit score implies to your credit card issuer that you’re responsible with money. Therefore, you’re more likely to make payments on time and understand how much you can afford to charge each month. Remember, good credit isn’t the same thing as good financial health, but creditors make the assumption that these qualities are one in the same. Aim to have both.
When you have a good track record. If you’ve made all of your payments on time and never maxed out your card, you’re more likely to get approved for a limit increase. You’ll also have a better chance if you’ve had your account with this particular creditor for at least six months to a year.
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The wrong time to ask for a credit limit increase
When you’ve recently requested increases elsewhere or applied for new lines of credit. When you apply for new credit, and sometimes when you apply for a credit limit increase, a hard inquiry appears on your credit report. New credit applications trigger a new credit penalty, which may hurt your credit, especially if the length of your credit history is short.
When you’ve taken on a lower paying job. If you’ve recently quit your job and taken on a lower paying, perhaps more fulfilling career, this isn’t the time to ask for an increase. Your spending power has decreased, so the issuer has no reason to extend more credit to you.
When your credit is iffy. If your credit score isn’t good or excellent, it’s likely that you won’t get approved for more credit because you haven’t shown good judgment with credit in the recent past. Build up your score before making a limit increase request.
When you’re embarking on an overseas adventure. Travel feeds the soul, but it also makes you more susceptible to credit card fraud. Travel also frees our (financial) inhibitions, leading us to spend more than we normally would. By upping your limit, you’ll give yourself more leeway to run up an expensive credit card bill you’ll have to pay when you get back to reality. Wait to increase your limit until you get back.
The worst they can say is no. Shouldn’t I try?
Oftentimes, a limit increase request will trigger a hard pull on your credit report. This can hurt your credit, especially if you have a short credit history. If you call your credit card issuer, you can ask if a hard inquiry will be initiated. Sometimes you can take a smaller increase and forgo the pull.
If you decide it’s the right time to up your limit, either call customer service or request a credit limit increase online. It’s a very simple procedure.
Bottom line: As with anything else, there’s a right and a wrong way to do things. Follow our guidelines above to time your credit limit increase request so it’s more likely to get approved. And, of course, try to keep your spending low enough that you can pay your credit card in full each month.