Credit cards are used hundreds of thousands of times per day by consumers and businesses. Of course, everyone has a different credit limit that can range from $100.00 to $100,000.00 or more. At first, a person’s limit depends upon their credit history when they are approved for the card. Some individuals are able to get credit limit increases quickly while others never seem to get them at all. Fortunately, there are a few ways to get a credit limit increase with a little bit of luck.
Basics of Credit Limits
Most people have credit limits from the hundreds to the lower thousands of dollars. Sure, some people have tens of thousands of dollars worth of credit, but they are the financially adept individuals. Credit limits are set by the credit company from the minute you are approved for a credit card. Obtaining a credit limit increase can happen in various ways. Typically, a person with good credit gets a higher limit than someone with bad credit. Everyone has the ability to improve their limits though.
Consider Your Company’s Policies on the Matter
Each company has a different policy on credit limit increases. For example, Discover will give automatic increases for on-time payments, but a person can call to request a new limit. There is an automated phone option that can automatically grant someone a higher limit or you will be connected to a customer service representative. On the other hand, Capital One rarely gives out limit increases, whether automatic or over the phone. Every company offers something different on the matter. Some companies allow a person to request a limit increase online while others require a mail-in form.
Typically, a credit limit increase will come automatically in varying amounts for on-time payments. These increase usually range from $100 to $500, but can go higher. For requested limit increases, you can expect anywhere from $250 to $2,500, depending upon approval and your credit history. You will normally want to deal with a customer service representative to get your increase. Without a doubt, you’ll need to be calm and level with whoever you talk to because they could just deny your request if you seem too pushy. On-time payments and good credit will usually result in a limit increase – once per six months at the most.
CLIs and Your Credit Score
Credit limit increases can affect your credit score in a couple different ways. An increase will result in a reduction of your debt to limit ratio, which is a positive thing for your score. On the other hand, a creditor might do a “hard pull” of your credit report to judge your worthiness of an increase. This will negate any benefit that you get from a limit increase. For some people, this doesn’t matter too much if they’re just looking for a limit increase. “Hard pulls” will last for 12 to 24 months on your credit report. Fortunately, some credit card companies use “soft pulls”, which won’t affect your credit in any way.
Credit limit increases are possible and pretty nice.
Not everyone will qualify for a credit limit increase when they request one. Still, it usually doesn’t hurt to try. Some people won’t end up with a limit increase, but they could end up with a slight rate reduction, which is always a good thing. A few credit card companies have strict rules on credit limits, while others are a bit more lax. In the end, it just depends upon what credit card companies you have a card with.
