How do I get a Credit Limit Increase?

There are two ways in which you can get a credit limit increase. One is to simply ask, in the form of a well-reasoned and professional sounding letter to your lender. The other is through automatic increases given or offered by the lender. In both cases, there are common factors that can determine whether you qualify for the limit increase, including credit history, change in income, and the timing of the request.

Getting a credit limit increase is not always a simple process, as the methods for approving or rejecting claims vary from lender to lender. As a general rule, you will need to show a history of regular payments, as well as a steady income.

There are several reasons why you might want to get a credit limit increase. The most obvious is simply to have more money available to spend, such as if you are planning a larger purchase. Of course, in such a situation, you should consider whether other forms of borrowing, such as a formal loan, might be a better value. Another benefit of an increased limit is that your existing borrowing will now be a smaller proportion of your total credit limit. This may affect your assessment for other forms of credit, such as a mortgage.

The biggest factor is how regularly you have made payments. Ironically, always repaying the full balance each month can count against you, as it means the lender will not see you as a profitable customer. However, full repayments are still much more likely to get you an increased limit than missing the monthly minimum. If you fail to make the monthly payments or go over your credit limit, it is very unlikely you will get an increased limit, especially if you have done so repeatedly.

Another factor that can help get an increased limit is a change in your personal circumstances. This may be in the form of an increased income, but can also be through an existing income becoming more stable, such as if you move from a temporary or contract job to a permanent position. To get an increased limit on this basis, you may need to actively request the increase, as not all lenders' credit assessment systems will automatically be aware that your income has increased.

The timing of a request for a credit limit increase can also be important. You will usually need to have held the card for as much as a year before applying. If you have had a request for an increase rejected, it's normally best to wait six months before asking again, or the lender may reject you again out of hand for appearing "desperate." It's also best to keep the amount of increase you ask for to a reasonable limit. If you need a big increase, it may be more effective to ask for it in the form of several smaller increases over a longer period.