So, you are looking for a credit limit increase but don’t know how to go about asking for one? Here is a simple guide to what to consider before asking your card provider for an increase and how to go about it.
What is a credit limit?
Your credit limit is the maximum amount that you will be able to spend on your credit card. You will be informed of what your limit is when you receive your card. It will typically be detailed in your introduction letter, or most providers will include this information in their online banking or mobile banking apps.
If you are in need of a specific amount of credit, it could be a good idea to ask a provider before making your application what limit you will be given (as most depend on individual circumstances). However, make clear that you are shopping around and not ready to apply yet, so they don’t leave a mark on your credit file.
What to consider before asking for a limit increase
In order to have the best chance of your card provider saying yes to a credit limit increase request, here are a few things to consider beforehand.
For how long have you had your card? – You will typically need to wait between three and six months after you have received your card before making a credit limit increase request.
Have you already made a credit limit increase request? – This may not be your first time and you may have already gone through a limit increase request; if that is the case, then most card providers suggest waiting a specified period of time before making another request. Also consider how many requests you have made, as if you have made a lot in a short period of time this could indicate to providers that you are financially stretched.
Have you shown good credit card behaviour? – If you have kept within your existing limit and have no missed payments, then a card provider is more likely to approve your request because you have demonstrated good borrowing practices.
How to ask for a credit limit increase
It may seem simple, but in reality you just have to ask your card provider.
Some cards will automatically offer credit limit increases a certain period of time after account opening, typically around six months. If your account is in good order and you always meet the minimum repayments, your card provider may write to you to inform you of an increase to your limit. You are under no obligation to accept this increase and can refuse and ask to opt out of automatic increases in the future.
However, if you don’t want to wait for an automatic increase, there are two main channels by which to request a bump to your credit limit.
Online – Log in to your credit card account on the card provider’s site, look for a credit limit increase request button and state your preferred credit limit. Some providers may also have this on their mobile banking app. Most increase request forms will ask you to provide information on your income and outgoings, so the card provider can assess whether to approve your request.
Phone – Talk to a customer service representative and see whether you are eligible for an increase. Once again, you will most likely be asked to provide some information on your current financial situation.
Depending on the provider, if your request is approved you will see the increase to your limit immediately.
Alternatively, the provider may give you a counter-offer of less than you requested. Worst case scenario is that they deny your request; if this happens, bear in mind that it could have a negative impact on your credit score.