It can be beneficial to increase your credit limit if you are financially stable. If you are able to pay your credit card bills on time and in full each month, then expanding your credit limit will improve your credit scores as it reduces your credit utilization ratio (the second most important FICO score component at 30 percent).
A higher credit limit will also increase your financial flexibility. Increasing your limit can be a bad thing if you struggle with overspending tendencies.
There are four ways to grow your credit limit.
- You can go to the credit card company website to make an online request. A great number of the issuers have this feature built into their website. After signing in, you should see a menu option to make an increase request. The creditor may ask you to provide updated information on your income. If you can show a higher income, this demonstrates better financial security. Many credit issuers will consider this as they review your credit line increase request.
- Another way to request an increase is by calling the creditor. Their number is listed on the back of your credit card. Start by querying the customer service representative if you are eligible for a credit line increase. They will likely ask if your income has increased as well as why you want the higher limit.
- You could also wait for automatic credit line increases. Many creditors provide these periodically after you have used the card responsibly for six months or a year.
- Finally, you can always apply for a new credit card. You are more likely to receive this if you have been timely in your payments on your existing credit cards. The same creditor may be willing to offer you another card that possesses a higher limit in lieu of the original one. Otherwise, you may simply receive a second credit card. Either way, you will have a higher overall available credit limit than you did before.