Credit Limit Increase - You can too!

[kel]

Not too long ago a friend was griping about how they didn't have much credit to work with while trying to get a loan. It reminded me of advice I've read in the past to call up one of your credit card companies every 6 months to a year and request a credit limit increase. I passed along that advice to him and then took advantage of it myself straight away - to awesome results!

The card I was requesting an adjustment on is one of my oldest ones with the lowest limits. I requested the limit be tripled - admittedly ambitious - to match the amount I was approved for on another card almost a year ago. The request was too high to be automatically approved and they told me they'd mail me their decision.

Well, lo and behold - they approved it! My friend was also able to get a new higher limit with a simple 5-minute phone call. I think I'll be remembering to do this more often.

You can too:

• Every 6 - 12 months, call up your CC provider and request an increase
• Give them a reason such as the holidays or travel. I literally told my agent it was for credit reasons as well as Travel and he said, I'll just put travel. So there you go.
• This will do a hard pull on your credit report, so do not do this if you plan on taking out a loan and already have a few pulls on your report (creditkarma can tell you how many pulls you have).
• As your limit goes up, credit gets better and amount you can expect to get bumped improves! It's a virtuous cycle.

Of course, maybe you never plan on taking out a mortgage or other loan and don't give a damn about your credit report. But if you do, or maybe you just never know (like me!), this is a quick and easy thing to do.

[eil]

I am unclear why on earth anyone would want to do this.

It's one thing to use a rewards credit card for life's day-to-day expenses and then pay the balance off in full each and every single month. But if you're bumping up against a credit limit in doing so, the problem is likely not the credit limit.

[kel]

The goal is definitely not to utilize more credit. The goal is to have a lower credit utilization ratio and more available credit, in order to have the excellent credit required to get the best interest rates. I recognize that that is not useful to everyone, but it IS useful to anyone planning on taking a loan out on a house in the future, which is not an insignificant number of people.

[forummm]

This could be useful in some scenarios. But I find that if you just always pay your bills on time, have at least 3 active credit accounts open, and keep your average account age up (keep your oldest cards open forever), the score will be high enough to get the best rate on any credit need.

It did freak me out a bit when I was in college and one company kept increasing my limits (without me asking for it) and ended up in being $10k--which was close to my annual income at the time. And then all the others did the same. I prefer lower limits now.

[Paul der Krake]

If you're going to have a hard pull show up on your report, you might as well apply for the top cashback cards. 3-4 cards typically puts you in 10k+ total credit territory and plenty to remain under 20% utilization with mustachian spending levels.

[bdoubleu]

If you're going to have a hard pull show up on your report, you might as well apply for the top cashback cards. 3-4 cards typically puts you in 10k+ total credit territory and plenty to remain under 20% utilization with mustachian spending levels.

We do semi-regular credit limit increases (hey, why not have lots of available credit - it's like increasing the E-fund!).  But we never have them do a hard pull.  They (Citi particularly) will give you an increase in your limit of ~10% every 6 or so months with no hard pull.  Strictly based on income.

Our credit limit is near $80,000 (didn't realize it was this high until just now! Not sure when/if we will stop, ha!) and we are not quite 30 years old yet.  We have 1-2 "regular use" cards, and a handful of cards we use very rarely.

Our utilization is well under 5% monthly, and always paid off monthly.  However, we are currently taking advantage of Chase Sapphire 0%/0fee balance transfer offer on ~$10,000 (already invested), so having a larger "available credit limit" helps our credit score not take such a huge hit.