At one point or another, every credit card holder will undoubtedly be wondering about credit line increases. Either asking or researching what they are, how to get started, inquiring about the process or anything in between.
Whether or not you get a credit line increase depends solely on why you are planning on getting one in the first place. Is it because you plan on buying a nice vacation for you and your girlfriend or boyfriend? Maybe make a big purchase? Or is it because you want to decrease your credit utilization ratio? If it's for the latter, then credit line increase may just be what you're looking for.
Nevertheless, we will provide you with the most consequential tips for getting your credit line limit increased.
1) Don't Asks For Too Much
One common mistake people make is asking for a credit limit that is too high. Believe it or not, this may become a reason why your request could ultimately be denied, forcing you to wait in order re-apply (possibly a few months).
In general, a request of 10%-30% of your current credit limit is a safe bet. Note that the amount you request should also coincide with your current income level. In general, the more money you bring in on a yearly basis also allows finacial institutions to take on more risk, which translates to giving you a potentially higher credit limit.
Nevertheless, asking for too much won't always hurt your chances of getting a credit limit increase, as banks typically settle on a lower amount if the requested amount was declined.
2) Argue A Balance Transfer
Financial institutions love balance transfers. Why? Because they attach a nice little balance transfer fee. So trying to entice these insitutions with a balance transfer may just be what the doctor ordered in situations where you're trying to obtain a credit limit increase.
However, before you make the move and forego a balance transfer, make sure that the amount you are saving with the credit limit increase will be greater than the balance transfer fee attached to your specific balance transfer. If the fee is higher than your potential saving, then it isn't such a good idea after all. However, in most cases, the transfer fees are lower than the potential savings and overall benefits of a credit limit increase.
3) Pick A Card You Have A Good History With
In general, the highest odds for credit limit approval are cards and institutions you have the best financial relationship with. What do we mean by "financial relationship"?
Cards that you have always paid on time, you have consistently kept your balances low and have never had any negative remarks on are always your best best for a credit line increase. Financial institutions love candidates who don't need money, so keeping balances low on your credit card and paying at least the minimum payment every month for a long duration of time (a year and above) tells these institutions that you are worth the potential risk of a credit line increase.
Keep in mind, most financial institutions will ask for additional information before applying for a credit limit increase, like employment information and specifically, your yearly income. Make sure those aspects are also inline with your credit line limit request to maximize your chances of getting approved.
4) Wait For An Automatic Increase
A little hidden secret: Financial institutions periodically review users' credit card accounts (usually every six months or so), to identify users who are low risk. Such low risk users are perfect candidates for credit limit increases, so these institutions automatically increase credit scores for selected accounts. These increases generally correspond to 10%-20% credit limit increase per account.
To help yourself, be a good customer by always paying your bill on time and keep your balance low at the end of every month. If you do, you will be virtually guaranteed an automatic credit line increase.
No matter the card you have or what the financial insitution is, improving your chances of getting a credit limit increase is all in your hands from the start. Simple things, like keeping your balance low every month and making your payments on time (yes, minimum payment included), undoubtedly increase your chances of getting a credit limit increase. Hey, it may even happen without you having to lift a single finger! So get going and start working towards that credit limit increase you're looking for.