The Best Time to Ask for a Credit Limit Increase

May 25, 2016 | 7 Comments

credit card limits

Prior to the financial crisis, credit card issuers allowed customers to request a credit limit increase through their online accounts. Many credit limit increases were given automatically. While issuers have become more cautious than they once were, the process isn't quite as difficult as one might think. Borrowers may be wondering when is the best time to ask for a credit limit increase, and I address one reader's question regarding this topic.

Question: Hello, I recently moved from Canada to the U.S. for a job. I applied and qualified for a Capital One card with a $500 limit. I have been using it regularly and immediately paying off the full amount instead of the minimum payments. I’m thinking of requesting an increase in my limit but I know that I might not get it. When is the best time to do it? Or should I just apply for another credit card? - Rita M.
Answer: Rita, given your great track record with the card, you should not have a major problem with a simple call to Capital One to request a credit line increase. You may have to provide financial information, including your annual income and your monthly mortgage or rent payment amount.

Your credit card issuer may also perform a hard pull on your credit report, which will lead to a temporary drop in your credit score.

Unspoken Rules of Limit Increases

Generally, credit card users are advised against requesting a credit limit increase during the first six months after obtaining a new credit card. Additionally, since issuers are more likely to check your credit reports, it’ll also improve your chances of getting a credit limit increase if you haven’t applied for any new lines of credit in the past six months.

Because you’ve had your card for 18 months with a solid repayment history, you might even get a credit limit increase with little to no hassle. If you want to be more diligent, you can pull one of your free credit reports from AnnualCreditReport.com to ensure that your credit profile is pristine.

Asking For the Increase

However, when asked for your desired credit limit, do not ask for an astronomical amount. For instance, you’re likely to be rejected if you say that you’d like a $15,000 credit limit, which is an extremely large increase from $500.

I cannot tell you the correct amount to ask for because there are so many factors that matter and every issuer reviews each case independently. These factors include your overall credit profile (including your credit lines with other lenders), your income, housing expenses (mortgage or rent), and spending patterns.

On the other hand, if you have bad credit and already have a secured credit card, it's actually much easier to increase your credit limit -- just put down more money for your security deposit (which is an easy way to boost your credit score in the eyes of credit bureaus).

Beware the Unexpected Decrease

Every once in awhile, you may find that your credit limit has suddenly been decreased. This not only impacts your credit score in terms of your credit utilization rate, it can also send you unexpectedly over your credit limit.

In the past (and especially in the years following the economic crisis of 2008), some financial institutions would do this to pull back on their risk. Unfortunately, the unsuspecting consumer would suddenly see their balances sail beyond their credit limits and their credit utilization rates soar. While less common now, it could still happen and is further proof of the importance of reading any and all notices you receive in the mail from your bank. (If you've signed up for electronic communication only, be sure to check the messages on your account at least once a month.)

Never Be Afraid to Ask for What You Want

Here's the thing about working with your financial institution, it's just as much in their best interest to keep you happy as it is for you to keep them happy. Even though it may seem at times like your financial institutions are high up in a tower with no interest in helping you, that's just not the case. At the end of the day, it's a relationship. And a relationship in which both parties communicate can be a healthy one.

Never fear your bank or credit company. Never think you can't reach out to them and ask for things like a credit limit increase. The absolute worst thing they can do is tell you no. And the best thing is they give you what you want and more (it can and does happen!). If you want to better leverage your relationship with your bank or credit card company, keep a habit of keeping all of your accounts in good standing and leaving them open. That way, when you call them and they look up your history with them, they'll see that you've been a good customer and they'll be motivated to keep you that way.

Yes, there will be times when they actually don't have the power to help you, but a "no" can always be a "not now." If you call your bank and ask for a credit limit increase and they tell you that they can't approve you, you might still get a "yes" in a few months if your credit score goes up and as your account with them ages.

Remember, today's "no" could most certainly be next quarter's "yes." So keep working towards your goals no matter what.

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Saturday, 04 Jun 2016 1:56 PM
<p>Excellent advice!! I will be sure to use in the near future👍</p>
Wednesday, 25 May 2016 8:51 PM
<p>You can just log in on capital one's website, go to services and request an increase. At no time does this affect your credit score. You can request an increase anytime you want and from what ive seen, as much as you want. The last time i requested an increase i knew my 6 month increment was near(18 months) and i requested one every day for 4 days until it was approved. The main factor in getting denied is either your balance is too high, youre only paying the minimum payment,or you just got an increase. Rarely does your credit score affect it. They usually only look at your history with capital one for CLI.</p>
tltx123
Tuesday, 03 Jun 2014 6:22 PM
<p>Let the account age. Capitol one is not a bad tradeline. However, the are much better. My favorite currently is AMEX for these reasons, I don't ever carry a balance, AMEX charges post faster, they allow me to pay faster, too many other perks to mention here. I have found them to provide sterling protection on purchases and fraud. Best wishes to your experiences in consumer credit. Take care of it, and it will take care of you when you truly need it ;-)</p>
Friday, 16 May 2014 4:20 PM
<p>Capital One is the best card for Cash Rewards and for users who pay off in full each month. Never once had an issue because I use it correctly. L.A. needs to understand to each his own. He probably just doesn't know much about credit</p>
disqus_8JQLjeuFF3
Saturday, 01 Mar 2014 10:12 PM
<p>Ya... Sound advice! Cancel your credit card and ruin your credit! Good job L.A</p>
Monday, 13 Jan 2014 4:13 AM
<p>@ L.A what you said is only about 1000% true LOL</p>
Wednesday, 13 Nov 2013 9:49 PM
<p>Rita M. Find yourself a GOOD card(s) asap, and trash the Capitol One card before it crashes you! Those crooks WILL find a way to get their hand into your pocket (or purse), and will rob you BLIND !!!!! For all you Wells Fargo customers, the outlook is not MUCH better.....go to most ANY other bank; their fees, terms, and interest are ludicrous.</p>