Asking for a limit increase on one of your credit cards when you're close to maxing out your balance is a bad idea. If you find that you're using most of your available credit, you'll be better of looking for ways to cut your debt levels rather than asking to borrow more cash. If you're in pretty good financial shape, boosting your card limit can actually improve your credit score.
Your card issuer will be unlikely to give you a limit increase if you've been lax with your account. If you're always late with your monthly installments or keep going over your existing limit, you'll be better off asking for a limit increase after you've maintained a period of stability. Conversely, if you've never missed a payment and have always stayed within your limit, the chances of your request being granted could be high.
Although some lenders allow you to ask for limit increases online, you could help your chances of having your request approved by calling your card issuer's customer service line. Ask to speak to a supervisor who has the authority to increase credit limits. Argue your corner by pointing out how well you've manged your account. Resist the temptation to resort to sob stories. Telling the person you're speaking to that you've just lost your job or need to pay for an emergency repair will be unlikely to help your cause.
As well as giving you a few extra dollars to you can use in an emergency, increasing your credit limit can help improve your credit score. A higher limit will decrease your credit utilization ratio, providing you don't go out and spend the additional money you have access to. Your credit utilization ratio accounts for 30 percent of your FICO score, so lowering it could have a dramatic effect on your creditworthiness.
If you have a good credit score and are currently carrying an interest bearing balance on one of your cards, applying for a new credit card account that offers a low balance transfer rate will be a better option than asking for a limit rise. This will allow you to shift your debt to a card that charges you less interest. You'll still lower your credit utilization ratio as long as you don't close your old account, so you'll be winning on two fronts.
Michael Roennevig has been a journalist since 2003. He has written on politics, the arts, travel and society for publications such as "The Big Issue" and "Which?" Roennevig holds a Bachelor of Arts in journalism from the Surrey Institute and a postgraduate diploma from the National Council for the Training of Journalists at City College, Brighton.