What To Do Before Requesting A Credit Line Increase
Making sure your credit profile is up-to-date can help you obtain a quick decision since the card issuer will have less information to verify.
Before you request an increase, verify the address and phone number on file. More importantly, make sure your employment status and income are accurate. Many cards will also verify your current housing payments to ensure a credit increase wont overextend your budget.
You should also review your credit report in advance to make sure there are no errors or fraudulent activity. While consumers are normally eligible for three free credit reports each year , all three bureaus are offering weekly access through April 2021. If theres incorrect or fraudulent activity, youll want to fix your credit report before requesting a credit increase.
Also, if able, youll also want to pay down your existing credit card balances as much as possible. Card issuers will deem you a lower risk if you have lower existing debt levels.
These are all steps you should take regularly, even if youre not planning on requesting a credit increase in the immediate future.
Whats The Difference Between A Credit Card Downgrade And Upgrade
There are a couple of specific situations in which a downgrade or upgrade may get you the card you want without having to apply for a new one.
- You may want to downgrade your rewards card if youre looking for a lower annual fee or interest rate.
- On the other hand, if youre looking to earn rewards for everyday spending or travel, you may want to upgrade your no-frills card to a rewards card offered by your card issuer.
In both situations, you may be allowed to keep your original account open so that you can continue to build credit from that account while, in many cases, avoiding the hard inquiry that typically comes with filing a new credit card application.
Pros & Cons Of A Higher Credit Limit
- More Available Credit & Lower Utilization: The more available credit you have, the better considering that is a major component of the Amounts Owed section of your credit score, which accounts for 30% of your total score. Credit utilization is calculated for each of your cards individually as well as for all of your cards in combination. More available credit will decrease your overall utilization as well as the individual ratios of currently tapped out cards. It will also signal to lenders that you are a trustworthy customer.
- Added Spending Power: A higher credit limit obviously enables you to spend more money. This may be a blessing for some, who perhaps need to finance car repairs or pay medical bills. However, it can also be a curse for those who use the added spending power to support unsustainable lifestyles and to dig deep holes for themselves.
- Minimal Credit Score Impact: Requesting and receiving a credit line increase is far less detrimental to your credit standing than applying for and opening a new credit card. Yes, a credit line increase will impact your credit altering utilization ratios, potentially requiring a credit pull and reducing your disposable income but the damage wont be too severe.
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Have Your Credit Needs Changed
An increase to your credit limit is something that many cardholders take advantage of as their credit needs change. For example, something as simple as booking a trip may mean you need access to a few hundred dollars or more in credit just to hold your reservations. Likewise, some hotels and rental car companies will ask to hold a deposit on your credit card to cover incidental expenses. Getting an increase can allow you to continue using your card for day-to-day spending without going over your limit even with credit held as a security.
Another benefit of a credit limit increase is to further take advantage of your . When you use your card for regular expenses and then make on-time payments each month, you can help your credit score while also reaping the benefits of cash back rewards or other perks as you earn points for spending.
Wait For Automatic Credit Card Limit Increases
Many credit card companies increase your credit limit automatically, without you having to lift a finger.
If you demonstrate that youre a responsible credit card user, and use the card enough to warrant a credit limit increase, you could get a higher credit line as frequently as every 6 or 12 months.
You can increase your odds of getting an automatic credit limit increase by:
- Building a positive payment history, never making late payments, and never causing payments to be returned.
- Using the card frequently, which generates swipe fees for the bank. If you dont use the card often, you likely wont be offered a credit limit increase.
Luckily, automatic increases wont generate a hard inquiry on your credit report, as you must agree to those beforehand.
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Upgrading Cards With American Express
American Express has some of the stricter rules around upgrades, partly because it offers a wide mix of personal, business and cobranded credit cards. As mentioned above, you cant product change between personal and business cards, and you have to stay within a single family .
Amex doesnt formally require you to wait a year to upgrade or downgrade cards. And you may be able to upgrade earlier than a year especially if you get a targeted upgrade bonus offer. However, when it comes to downgrades, I strongly recommend waiting at least a full year.
Amex has very broad language in its terms and conditions, giving it the ability to claw back your bonuses if it believes youre gaming the system. One of the few types of abuse explicitly defined is downgrading a card within the first year. For example, heres the relevant section of the welcome offer terms and conditions for the Delta Reserve Amex:
If we in our sole discretion determine that you have engaged in abuse, misuse, or gaming in connection with the welcome offer in any way or that you intend to do so that we did not intend for you if you cancel or downgrade your account within 12 months after acquiring it or if you cancel or return purchases you made to meet the Threshold Amount), we may not credit bonus miles and MQMs to your account. We may also cancel this Card account and other Card accounts you may have with us.
How To Get A High
Many card issuers don’t publicize their credit limits, but some include a minimum credit limit in their pricing and terms. Be sure to read closely before applying for a credit card so you know what to expect if they do only offer a minimum.
You won’t know your exact credit limit until your application is final, and credit limits vary depending on your specific credit score and income.
If you end up with a card that has a lower credit limit than you wanted, you can always ask for a credit limit increase by speaking to your issuer over the phone or making a request online. Some issuers will automatically increase your credit limit once you’ve made consecutive on-time payments after the first few months.
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Benefits Of Credit Limit Increase Vs New Card
Anyone who is looking to increase their available credit probably wants the ability to spend more with the card. This could be for several different reasons. You may want to put more of your everyday spending on the card to earn rewards. Maybe you have a big upcoming purchase that you want to use the card for and have budgeted to pay it off over time.
If you need extra credit, then you have two options. You can work to get an increased credit limit on the current card, or you can apply for a new card. While getting a new card might be attractive because of the sign-up bonus that it offers, it might not be the best choice for you. Every time you get a new card, your average length of credit decreases. Because this factor makes up 15% of your credit score, you could see a short-term decrease in your FICO score.
The next time you are looking to add more available credit, you may be better off forgoing a new card and asking for a credit limit increase on an existing card.
6 Benefits Of Increasing Your Credit Limit
What Is A Credit Limit
Your credit limit is the maximum amount of credit your financial institution is willing to extend to you on a particular credit line. In other words, your credit limit is the highest balance you can carry on your credit card at any given time although you may be able to spend over your credit limit in some situations.
The financial institution will set your credit limit when you apply for a new credit card. Your credit limit is based on multiple aspects of your credit history including your income, and overall financial situation.
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Upgrade Card Interest Rates And Fees
Annual Fee: None.
Annual Percentage Rate APR: 6.99% to 29.99% APR.
Cash advance APR: Same as your regular APR.
Cash advance fee: None.
0% Introductory APR: Not offered.
Balance transfer fee: None.
Foreign transaction fees: None.
Late payment or return payment fee: None and no penalty APR for late payments.
Minimum monthly payment: Is based on the term of your credit line repayment schedule, which can be between 24 and 60 months, with the applicable APR applied. Otherwise, the minimum monthly payment will be $5 or the actual amount you owe on your credit line if it is less than $5.
Upgrading Cards With Citi
Between increased competition from other issuers and a painful devaluation of its ultra-luxe Citi Prestige® Card, Citi has lost a lot of ground in the travel rewards industry in recent years. You can upgrade a Citi credit card if you receive a targeted email invitation. You can also call the number on the back of your Citi card and ask whether there are any upgrade options.
Interestingly, Citis bonus eligibility requirements dont seem to be affected by upgrades. Specifically, the landing page for the Citi Premier® Card notes:
Bonus ThankYou® Points are not available if you received a new cardmember bonus for Citi Rewards+, Citi ThankYou® Preferred, Citi ThankYou® Premier/Citi Premier® or Citi Prestige®, or if you have closed any of these accounts, in the past 24 months.
So, upgrading or downgrading Citi ThankYou Rewards cards without receiving new cardmember bonuses shouldnt prohibit you from earning a bonus on a Citi ThankYou Rewards card every 24 months if you time your applications carefully. But check the language on your application before applying. Likewise, youll see similar language on most cobranded Citi cards.
The information for the Citi Prestige Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
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Should I Request An Increase
First, assess why you need the extra credit. There are 2 common reasons why cardholders request an increase:
- Looking for more spending power: You might be interested in making a large item purchase or even starting an ongoing project such as home renovations. Extra credit can help in both of these scenarios.
Banks and credit card companies are more likely to approve an increase to your credit limit if you pay your bills in full and on time.
When Are You Eligible For An Increased Credit Line
There are several opportune times to request a credit line increase. Graduating from school and entering the workforce is a great time to ask your issuer for a higher limit. Getting a pay raise or transitioning to a new, higher-paying job are also signals that you might qualify for additional credit access.
While each lender has specific criteria for granting increases, only established cardholders should expect to receive one. Sensibly, banks will only lend extra money to customers they have reason to trust, and that trust must be built over time.
If youve been approved for a credit increase, you can request another as soon as six months later. If you were denied, youll want to wait until you can demonstrate a pattern of responsible card use. Your odds will go up if you have improved your payment habits or if your credit score has gone up for other reasons.
Upgrading To The Bonvoy Brilliant Or Hilton Honors American Express Aspire Card
It might make sense to upgrade an Amex card if youre targeted for a bonus to upgrade to the or the Hilton Honors American Express Aspire Card, the premium cards of each respective hotel chain. With the Hilton Aspire, weve seen upgrade bonuses of up to 150,000 Hilton points, which is the same as the best-ever public offer for new applicants on that card .
The information for the Hilton Aspire card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
In that case, upgrading and keeping your credit history is a better deal than closing one card to open a new one. Its a bit of a tougher decision with Marriott, as upgrading to the Bonvoy Brilliant means giving up an entry-level card that comes with an up to 35,000-point anniversary free night. I can get several hundred dollars of value out of a 35,000-point free night, though. So, I would prefer to have as many as I can.
Be A Smart Credit User Dont Go Over The Limit
Your credit card limit is a powerful number. Many people use it to flaunt their financial status but if theyre not careful about their spending habits, their credit limit can hurt them instead of work for them.
Assess yourself first before increasing your credit limit. If you dont trust yourself to keep your spending in check, its best to leave your credit limit as is. While increasing your credit limit provides you with more borrowing power and has a positive impact on your credit score, it may have an opposite effect if you max it out often. When you get access to more credit, use it responsibly, and keep your credit utilization ratio in mind. Your budget and credit score will thank you for it.
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A Change To Your Interest Rate
If you have credit card debt, negotiating a lower interest rate can help you save on interest rate payments, pay your debt down faster or lower your monthly debt payments. It cant hurt to ask, and if youre told no, you can pursue other options, like moving your remaining balance to a balance transfer card with an introductory 0% APR period.
Upgrading A Chase Freedom To A Chase Sapphire
Another common upgrade Ive seen people make is from a Chase Freedom , Chase Freedom Flex or Chase Freedom Unlimited to a Chase Sapphire Preferred or Chase Sapphire Reserve. Its generally best to wait until you can apply for the Chase Sapphire Preferred or Chase Sapphire Reserve and earn the sign-up bonus. But, if youve used up all your 5/24 slots and dont plan to be under 5/24 any time soon, upgrading might be your best option. The information for the Chase Freedom has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
You can also downgrade in the reverse direction. If you cant justify the annual fee on your Chase Sapphire Reserve or Chase Sapphire Preferred, downgrading to a no-annual-fee card such as the Chase Freedom Flex or Chase Freedom Unlimited is a great way to keep your account open. You generally want to keep your accounts open so they continue to age and strengthen your credit report.
Automatic Credit Limit Increase
Some credit card issuers automatically raise your credit limit as you handle credit responsibly. That means charging only a manageable percentage of your total credit limit and making your payments on time each month. Many credit card issuers review accounts periodically and automatically raise the credit limit for cardholders who meet their criteria.
Show Proof Of Increase In Income
The earning potential and the ability to repay the dues on time is the most important factor that the Credit Card companies consider while determining the credit limit. So, if you have received a hike in your salary or if you have identified an alternative way to increase your income, submit proof of the same to the credit company and increase the credit limit.
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If You’re Part Of An Apple Card Family Account
Only account owners and co-owners of a shared Apple Card account can request a credit limit increase.2
1. Apple Card is issued by Goldman Sachs Bank USA, Salt Lake City Branch.
2. Each co-owner is jointly and individually responsible for all balances on the co-owned Apple Card including amounts due on the existing co-owners account before the accounts are merged. Each co-owner will be reported to credit bureaus as an owner on the account. In addition, co-owners will have full visibility into all account activity and each co-owner is responsible for the other co-owners instructions or requests. Credit reporting includes positive and negative payment history, credit utilization and additional information. Card usage and payment history may impact each co-owner’s credit score differently because each individual’s credit history will include information that is unique to them. Addition of a new co-owner is subject to credit approval and general eligibility requirements. Learn more about Apple Card eligibility requirements. Either co-owner can close the account at any time which may negatively impact your credit and you will still be responsible for paying all balances on the account. For details on account sharing options including some of the risks and benefits, .