If you’re a credit card customer with an account in good standing, this is a good time to ask for a credit limit increase. After the financial crisis in 2008, issuers got very stingy with credit, cutting limits or closing accounts entirely to limit their risk. Today, these companies are feeling more confident about the economy and are willing to take on more risk; they’re sending out more offers and some are considering applicants with lower credit. We don’t want to encourage anyone to load up on more debt, but a higher credit limit can actually boost your credit score — if you use a lower percentage of your credit limit, that is — so a higher limit is a good tool if used responsibly. Read on to find out what to say — and what not to say — to get more credit.
Your chances of getting a higher limit are better if you have very good credit, says Natalie Lohrenz, director of counseling at the Consumer Credit Counseling Service of Orange County in California. “It’s probably not going to happen if your credit is merely good or average,” she says. But if you have an A+ score and want more credit, here are some tips on how to get it:
1. Explain why you want the increase. If you plan to start charging more — maybe using the account to pay your monthly smartphone bill or to book business travel — tell the representative when you call. Say that you want to keep your credit utilization ratio below 30%, but that you’d like to use the card more. If it’s a rewards card, so much the better. You can say, “I’d really like to take greater advantage of your great rewards program, but I’m concerned about my utilization ratio getting too high. Can you raise my limit?”
2. Don’t be afraid to argue your case. You should explain why you think you deserve a higher credit limit, says Lohrenz. If your credit score has increased since you opened the card, point that out. “You should also mention if you’ve had an increase in your financial means since you opened the account,” she says. If you got a promotion, settlement, second job or other increase in your income, tell the issuer. Likewise, if you just finished paying off a big debt (maybe college tuition or a mortgage), let them know. That conveys to the issuer that your disposable income has increased.
3. Make your issuer get competitive. With a high credit score, you probably get direct mail solicitations all the time. Use that junk mail to your advantage. “Creditors know you can easily go elsewhere to get an increase, so use that to your advantage,” Lohrenz says. “Tell them you are considering a balance transfer to another card but would prefer to just stay with them if they would just increase your limit – they don’t want to lose a good customer.”
4. Keep the sob story to yourself. Of course, if you just lost your job or suffered another financial setback, more debt is not going to solve your problems in the long run. But if you’re seeking an increase anyway, leave out the part about the lost hours at work, hospital bill or ballooning ARM payment. Not only will this almost certainly keep you from getting an increase, but voluntarily offering this “red flag” information to your issuer might prompt them to cut your limit.