How to Increase Credit Limit

How to get a credit limit increase without asking

  • Always pay your bill on time
  • Try to pay your bill in full if possible
  • Use only a portion of your credit limit
  • Update your income with the credit card company
  • Keep your credit card account open for a minimum of six months
  • Pay down the debt you owe

This guide and its editorial content explain how to apply for a credit limit increase, provide tips for getting that increase and offer insight on ways to raise your credit score.

Getting a credit limit increase is amazing. It’s the kind of experience that feels like getting a promotion at work or better yet, a raise. 

An increase to your available credit is a watershed moment in your credit history, more so if you’re rebuilding a bad credit score or you are brand new to having a credit card. 

An increase to your credit limit is both a warm, fuzzy feeling and a key indicator that you are responsible with your credit spending.

A bigger credit limit vastly improves your purchasing power. But that’s just one of the advantages obtained when you increase your limit. A higher limit can have a positive impact on your credit score, as well — as long as you maintain a healthy credit utilization rate

Something important to know about your credit card is that thirty percent of your credit score from the three major credit bureaus gets calculated based on your level of debt. 

What that means is your credit utilization or the amount of available credit you’re using, is one of the biggest parts of your credit score. And a credit limit increase will instantly lower your credit utilization ratio because of how it affects the math.

how to earn a credit limit increase

That means if you raise your credit limit and keep your debt the same or pay some of it down, you automatically get a higher credit score.

Getting an Automatic Credit Limit Increase

Some credit card issuers make it easy and automatically raise your credit limit. They do automatic increases when you hit benchmarks that tell them you handle credit responsibly. 

Those benchmarks include maintaining a manageable credit utilization rate and consistently making your monthly payments.

A lot of credit card issuers review their customers’ accounts periodically and will automatically raise the credit limit for some of their cardholders.

Their goal is to help you build credit and help you qualify for better options. The stronger your credit, the better it is for both the credit card issuer and for you, the customer. 

So, in some cases, the best time to ask for a credit card increase is never. Instead, wait for an automatic review — whether it’s your Reflex Mastercard® or your Hilton Honors American Express.

ask the credit issuer directly for a credit line increase

Ask the Credit Card Issuer Directly

Some credit card issuers will only raise your credit limit if you ask. There are usually two ways to initiate the inquiry process: 

Call Your Credit Card Issuer

The easiest and most direct way to start the inquiry process is to call the toll-free number your credit card issuer provides. Once you call, listen to the system prompts. 

Usually, there are instructions provided for requesting a credit limit increase. If no prompt is available, wait for the chance to speak to a live customer service representative. Once you’ve got a human, ask them about increasing your credit limit.

Do it Online

These days, a lot of credit card issuers let you request a credit limit increase online. To do it that way, log in to your account and look for the button or menu option related to credit limit increases.

Be prepared to provide additional information including monthly income, the amount of credit limit increase you want, and the reason you want the increase.

does the request for a credit limit increase hurt your score?

Does Requesting a Credit Limit Increase Hurt Score?

Yes, in some instances requesting a credit limit increase can hurt your credit score.

Just like when you apply for a credit card, the act of asking for an increase to your credit lines will initiate a look into your credit history.

Depending on the type of inquiry, this can affect your credit score.

There are two kinds of credit pulls, but your credit score is only affected by one of them.

This happens during a hard pull on your credit report. Depending on the card issuer, a limit increase request will sometimes trigger a hard pull on your credit report. This hard pull can hurt your credit, especially if you have a short credit history.

If you call your credit card issuer, you can ask whether a hard inquiry will be initiated. 

Difference Between a Soft Inquiry and a Hard Inquiry

It’s important to note that when you request an increase in your credit limit, a soft inquiry will not affect your credit score.

  • A soft pull is an inquiry that appears only on the version of your credit report you can see. 
  • A hard pull is a different story entirely. A hard inquiry will affect your score depending on the specific information in your credit report.

Hard pull can appear on all versions of your credit report for up to two years.

That means if you have a lot of debt in your payment history from other sources like student loans or home mortgages, you should consider waiting to ask for a credit limit increase.

Try to pay off your debts and get yourself in a better position overall.

Remember you can always check your credit history to see what kind of pull the credit card issuer does. So don’t hesitate to ask your credit card issuer what whether they’ll do a soft or hard credit check beforehand.

how to increase credit limit? one way is to increase your security deposit

Extra Tip: Increase Your Security Deposit

Some credit cards are called secured. A secured credit card requires a cash security deposit and this, in turn, reduces the risk to the issuer. 

So one sure-fire way to increase your limit, if you have a secured credit card, is to pay more towards your security deposit. To do so, the best bet is to contact customer service and have them provide the proper steps to do this. Each credit card issuer has a slightly different process.

how soon is the decision on a credit line increase request made?

How Soon is a Credit Limit Increase Decision Made?

If your credit card account is in good standing and you can demonstrate that you have enough income to handle a higher credit limit, many times you’ll find out immediately if your request was approved. Sometimes, though, the process takes a bit longer and your credit card issuer will sometimes notify you a few days later via mail.

what to do when you get denied a credit limit increase

What to do When a Credit Limit Increase Gets Denied

A credit limit increase can be denied by a credit card issuer for a variety of reasons including: 

  • The credit card account may be too new
  • It may be too soon since a previous credit limit adjustment
  • You may not have enough income to qualify for an increase
  • Or, you might simply have an account that doesn’t receive any total credit limit increases

Beyond those common reasons, negative marks on a person’s credit history are often the reason a credit limit increase gets denied. 

If that is the case, you will receive an adverse action letter. This letter is required to explain in detail the factors that caused the adverse action. Common factors include missed payments or high balances. You’ll also get a free credit score report if your score was used in the decision to decline your request.

If your request was denied:

  • Pay attention to the reason(s) given in the letter
  • Take actions to improve your credit in those areas
  • Continue to make payments, even if only minimum payments, on time 
  • Wait a few months, and then try again

People Also Read

Continental Finance is one of America’s leading marketers and servicers of credit cards for people with less-than-perfect credit. Learn more by visiting ContinentalFinance.net

Should You Get a Second Credit Card?

What are the advantages of having a second credit card?

This article will cover:

  • What the best second credit card is for you
  • Does getting a second credit card hurt credit score
  • Tips for choosing another card

You’ve finally started to rebuild your credit score. Things are going great. And then you see it in the mailbox: An offer for a brand new credit card!

You’ve been pre-approved or pre-selected to receive a whole new line of credit. But is that wise? Will it help? You immediately wonder, “Should I get another credit card?”

We start by covering the basics of getting a second card. No matter your reason for considering another credit card, the benefits of doing so all come down to the same couple of pros:

  • The most important reason is a second card, if managed properly, can improve your credit score and have a long term positive impact on your credit history.
  • The next most often cited reason is that another card can act as a backup to your primary card in case of an emergency.
  • And the third most common reason for getting a second card is it can diversify your credit pool.
How a second card improves your credit score

How a Second Card Improves Your Credit Score

There are potential benefits to having more cards. Having two or more cards is a strong signal to credit card issuers that you can manage your debt, personal finances and credit successfully.

Showing you can manage your finances and establishing a good payment history gives lenders confidence and that may lead to favorable opportunities, such as credit limit increases.

Also, if you manage to pay down your balance on both cards, you will automatically improve your credit score by the next month it gets calculated. This improvement happens because you improve your credit utilization ratio.

How a second card helps in emergencies

How a Second Card Helps in Emergencies

This may seem obvious, but it’s still an important feature. If you have multiple cards, then you have an emergency option if something happens to your primary card. 

This really comes in handy when you travel. A lost card when you are on vacation can create a personal finance crisis. But having that other option can tide you over until your credit card issuer gets you a replacement plastic.

How a second card helps diversify your credit

How a Second Card Helps Diversify Your Credit

One benefit of a second credit card that should not be overlooked is the diversity it brings to your credit history. 

Most of the time people get caught up in the details. They’re looking at a card’s interest rate or its annual fee or its foreign transactions fees. 

But having a second card has the ability to provide diversity to your credit report. Having a variety of types of credit, including travel rewards cards, cash back rewards programs, and charge cards, shows a credit issuer that you can maintain good spending habits through a variety of different lending channels.

What are the pitfalls of a second credit card?

What are the Pitfalls of a Second Credit Card?

Now that you know how a second card can benefit you, take a moment before jumping at that credit card offer in your mailbox to consider the problems a second card can create.

The offers you receive in the mail, even with transparent advertiser disclosures, may not be telling you the whole story. There are some valid reasons you should avoid getting a second or third or even fourth credit card.

Those reasons include:

  • Another card can create problems paying your bills on time.
  • Another card can create more debt problems after you balance transfer card debt.
  • Another card can create obstacles when you are looking to make a major purchase like a car or home.
How another card creates problems with paying bills

How Another Card Creates Problems with Bills

Remember how above we spoke about how that second and third card can help with your credit utilization because it gives you more available credit? The opposite is true. 

Multiple credit cards can create problems for you because you have more available credit and if you use that credit up, you may sink further into debt. 

A lower credit limit means your ability to consistently pay off your credit balance is easier. Sometimes less really is more!

How another card creates problems with managing debt

How Another Card Creates Debt Problems

Some of these credit card offers you receive in the mail may contain very tempting terms, including a low introductory rate or 0 percent interest for a period of time. That’s when you start considering taking your debt on one card, and transferring the balance to this new card.

But as with the previous obstacle, if you can’t pay down that debt before that term’s period of time ends, you’re run the risk of being stuck with more debt than before.

How another card creates problems with big purchases

How Another Card Creates Purchase Problems

If you’re looking to make a big purchase, such as a new automobile or a new home, you should be wary of adding new credit cards to your finances. The bigger purchases will show up as new lines of credit on your credit report and will take up a very big chunk of your credit history moving forward.

It might work better for you if you wait a year before opening a new line of credit. That big purchase may no longer be seen as a new line of credit by that time.

What is the best second card to choose?

What is the Best Second Card to Choose?

You have a lot of options in front of you. It could be a Surge Card, or a FIT Mastercard, or a Discover It Card that you are trying to decide between.

First of all realize there’s no one single correct answer. What you want to do is choose the card that is best for you and your personal finances. So what you do is you take the offers, put them in a pile and start looking at what terms you are being offered.

Tips to Help You Choose a Second Card

  • Have a goal in mind. You want to know what your expectations are. Determine what you are looking to achieve by having a second card. That will help you define which offer is best.
  • Pay attention to the APR and annual fees. Fees are a big part of how credit card issuers make their money day in and day out. But if you pay attention to your terms and conditions there is a good chance you will be able to find a second card that has better fees and terms than your previous card.
  • Consider any rewards programs you were offered. If you have raised your credit score diligently over the period you had your first card, your second card could come with a variety of options including travel rewards and cash back bonus rewards. Even at 1% to 3% rates, a cash back bonus program can help you save each month on your bills including groceries, gas, and restaurant purchases.
  • Create a relationship with a new financial institution or lender. A second card can be obtained through a completely different bank or credit issuer. And that can give you a chance to create a positive credit history with a brand new group.
Conclusion: Sometimes two cards are better than one

In Conclusion

Getting multiple credit cards can help you build your credit and improve your score. But you need to make the decision very carefully and then use your second card wisely. Remember that you are managing your debt and your finances no matter how many pieces of plastic you have in your wallet. 

Stay diligent and be responsible with your bills and your purchases. 

If you stick to the path that you were when you started your credit building journey, then a second card will help you achieve even better results as your grow your credit score.

People Also Read

Continental Finance is one of America’s leading marketers and servicers of credit cards for people with less-than-perfect credit. Learn more by visiting ContinentalFinance.net