4 Efficient Ways to Increase your Credit Card Limits!

Earning a credit limit increase feels similar to receiving a promotion or a salary raise at your existing job. Even if it isn't as significant, it is a watershed moment in your credit history, especially if you are new to credit or attempting to improve a poor credit score. In many respects, an increase in your credit limit is a thumbs-up, signaling that you have been responsible for your credit card spending.

One of the key advantages of having a higher credit limit is increased purchasing power, but it is not the only advantage. A higher credit limit may be advantageous to your financial well-being as long as you don't go into a shopping frenzy and spend all of your newly available credit. It's critical to note that the amount of debt you have contributes to 30% of your credit score, which is fairly significant. 

Credit use, or the amount of available credit that you are currently consuming, plays an important role in this. If you keep your debt the same or pay it off completely, increasing your credit limit will lower your credit utilization ratio. As a consequence, your credit score will improve. So, here are 4 ways how to credit card limit increase.

4 Ways to Increase Credit Card Limit

1. Automatic Credit Limit Increase

If you have an excellent credit history, certain credit card issuers may automatically boost your credit limit. Two approaches to attain this aim are to charge only a small portion of your total credit limit each month and to make your monthly payments on schedule. 

Many credit card companies conduct periodic account checks and automatically boost credit limits for customers who meet their eligibility standards.

2. Getting a Bonus from Your Credit Card Company

However, although some credit card companies will automatically increase your credit limit, others will only do so if you request it. To begin, contact the toll-free number (which may be located on the back of your card or on your monthly statement) and follow the steps until you reach the relevant department—there may be a prompt for requesting an increase in your credit limit. 

If this is the case, choose to speak with a customer service representative and request an increase in your available credit limit. Some credit card providers allow you to request a credit limit increase through your online account. Log in and look for a menu item that allows you to request a credit limit increase.

The card issuer will most likely want further information from you in order to process your request. They may need details such as your monthly income, the credit limit increases you're requesting, and the reason for the request.

3. The Soft and Hard Pull

In order to complete your request, the credit card company may check your credit history. This can be done by a hard or soft pull, depending on the credit card provider. A soft pull or inquiry will have no effect on your credit score; these are the kind of queries that will only appear on your version of your credit report. A strong pull, on the other hand, may have a negative impact on your credit score depending on the other information in your credit report.

Hard inquiries will be visible on all versions of your credit report for up to two years from the date of the hard inquiry. If you have a lot of debt in other places (such as school loans or house mortgages), you may want to wait until you have paid off part of your previous debt before requesting a credit limit increase.

If you are concerned about having inquiries on your credit report, you should first enquire with your credit card issuer about whether a soft or hard credit check would be performed before proceeding with the application.

4. Increase Your Security Deposit

People with secured credit limits are frequently able to increase their credit limit by donating more to their security deposit. Increasing your credit limit on a secured credit card is best accomplished by calling the card's customer care number and obtaining specific instructions, as each issuer is different.

Credit Limit Increase Denied

If your account is in good standing and you have enough income to support an increase in your credit limit, you may be notified promptly whether or not your request was granted. If you are unsuccessful, the card issuer will notify you of their decision within a few days, usually via mail.

Your request for a credit limit increase may be denied for a variety of reasons. It's possible that your account is too new, that your credit limit hasn't been increased in too long, that your income is too low to qualify for an increase, or that you have an account that doesn't qualify for credit limit increases, such as a secured credit card account, to qualify for an increase.

Furthermore, if you have negative information on your credit report, your request for a credit limit increase may be denied. You will be given an explanation of what happened, which may include recent delinquencies or large credit card balances, among other things if you receive an adverse action letter. If your credit score was a factor in the decision to deny your request, you will be given a free credit score disclosure. 

If your request is not authorized at this time, take note of the reason(s) given in the adverse action letter. Improve your credit in those areas first, and then wait a few months before applying for a loan.

Maintain vigilance over your credit limit!

Keep in mind that certain credit cards charge a fee to increase your credit limit over the default amount. To begin, the First Premier Bankcard charges a fee of 25% of the increase in credit limit each time you are approved for an increase. It is vital to know that this credit card is particularly developed for those with bad credit. 

If you currently have a credit card with a similar feature, you should avoid requesting an increase in your credit limit and instead transfer your amount to a better credit card as soon as you are eligible.

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