Prove that you handle credit responsibly, and you can request an increase to your limit. A higher limit not only gives you more financial flexibility, but it also can increase your credit score. While a credit card company is under no obligation to up your limit, it often will do so when you handle your account properly.
Your situation has to be right to request a credit card limit increase. If you have a history of late charges or over-the-limit fees, your company isn’t going to give you additional credit. If you’ve never missed a payment, you stand a better chance. You also need a good credit score. The threshold varies by company, but a credit score over 700 generally paints you as a low-risk borrower. The company will check how much credit you have with other companies. If your other credit lines are maxed out or if those card limits are too high, the credit card company may not agree to your request.
Benefit for You
Higher credit limits mean you have money available for emergencies, events, vacations or home improvements. You shouldn’t immediately max out your new limit, but it does provide peace of mind. Additionally, a higher limit increases your credit score. One factor that affects your credit score is the proportion of credit limits to outstanding debt. If you increase your limit without using the line of credit, the difference between the line and the balance improves your score.
Benefit for the Company
Credit card companies want to accommodate good customers, especially those with a strong repayment history and a good credit score. A company knows that if it does not agree to a a well-qualified customer's requested credit limit increase, he is likely to find a better deal elsewhere. If you borrow and repay as agreed, the company makes money on the interest and you enjoy the benefits of your card.
Requesting an Increase
The easiest way to request a credit limit increase on your card is to call and ask. When you call the company, ask to speak to a supervisor who has the authority to make such decisions. Cite your positive history with the company and request the increase. If the supervisor initially refuses, inform him that you are willing to close your accounts if he doesn’t grant your request. If you have offers from other companies, mention them. If the company stands fast, be prepared to follow through with the move to a company that is more accommodating. Once you achieve the increase, use the card responsibly and keep the balance as far from the limit as possible. Mishandle the account, and you ultimately can find your limits decreased.
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