A credit limit increase usually happens when you have been using your credit card for a long period and the provider decides to increase your overall credit limit. Some providers automatically increase your limit once you have proven to be very responsible and trustworthy with your debt while others will need to be requested. Having an increased credit limit allows you to borrow more money and be able to do more transactions.
Some lenders also grant a credit limit increase even if you only have the credit card for a short while. You can even request a credit limit increase after a few months of using the card if you meet their requirements. It is strongly advised that you check out their qualifications so you can avail of this feature for your credit card and make more transactions.
Most of the time, lenders will notify you if there is an impending credit limit increase so you can either agree with or deny the increase. If you’re trying to figure out how to raise your credit card limit from your phone in five minutes, check out the guide below.
What to Consider Before Requesting a Credit Limit Increase
Having an increased credit limit allows you to purchase more and make larger transactions but it also comes with great responsibility.
This is why you need to consider some things first before you request a credit limit increase. First, you must ask yourself if you can make payments on time with the increased credit limit and spending.
The higher your credit limit becomes, the more you get to pay and it might affect your overall monthly budget. You should also consider your credit utilization ratio which can heavily impact your credit score as you now have more credit to use each month.
Lastly, some lenders often do a hard inquiry on your credit report which can take a toll on your overall credit score.
How to be Eligible
Once you have carefully considered if you want to have a credit limit increase, you should also learn how to become eligible for the increase. The first factor that many credit card providers consider is if you make on-time payments.
Responsible cardholders often receive the most amounts of prompts to increase their credit limit as the lender now has confidence in the cardholder that they will pay on time. Another way for you to be eligible for a credit limit increase is when you regularly pay in full or even pay more than what is the minimum required payment.
Some cardholders often pay ahead of their monthly due date which makes them trustworthy. You should also consider your credit score and if there are any recent changes to your income if you want to become eligible.
How to Increase Your Credit Limit from Your Phone
Requesting for a credit limit increase can be done on the phone. It is also very easy if you know the process and if you can prepare all the information needed for the increase.
First, you need to prepare information such as your updated physical address or home address, your Social Security Number, your latest employment status, your monthly and yearly gross income through salary slips or income tax returns, your monthly mortgage or lease payments, and the amount you wish to have.
You can then call the customer service hotline of the provider and dial the specific department that handles credit card limit increases.
Provide the necessary information and see if they can approve your request.
What to Do If You’re Denied
Most of the time, if you have all the documents ready, you can be approved of the credit limit increase but there is always a chance that you might get denied. It is a reality that you should also expect. If you do get denied, there are things that you can do to resolve the issue.
You can ask the reason why you were denied so you can correct it and have a better chance of getting approved after your next attempt. If your credit history is insufficient, you might want to further establish your track record by continuously using a credit card.
Most providers do not offer a reason why but you should pay your credit card and other bills on time every month after your request. You can even try to pay more than the minimum monthly amount and lower your credit utilization rate.
Tips for Requesting a Credit Limit Increase
Credit card holders must always be prepared when they want to request a higher credit limit.
This is why you should always have all of your information and documents ready in case they ask you for it. Be prepared to defend your request. Always have several reasons why you need to have a higher credit limit.
By having a clean record of on-time payments, you can easily defend that you can always pay them even when you have a higher credit limit.
Lastly, it is best to request a credit limit increase after you receive a raise or your annual income increase.
Benefits of a Higher Credit Limit
Having a higher credit limit does have its benefits. You have better purchasing power now that you have more balance on your credit card. You can purchase the things that you might have held off on before due to their price but now that you have a better credit limit, you can finally buy the things that you like.
Additionally, you also have an improved credit utilization rate now that you have a higher limit. The quantity of credit you have is represented by your credit utilization.
This means that if you have a $10,000 credit limit and it was increased to $20,000, you have a better credit utilization ratio than before. It also makes it easier for you to keep it low with a higher credit limit.
If you’re using your credit card responsibly, you should not worry about requesting a credit limit increase. There might be no guarantees that you will get a higher credit limit after your request but following the guide mentioned above should increase your chances.