Are you thinking about increasing your credit limit to boost your buying power? This can prove to be an exciting time for you, but don’t get your hopes up just yet. It’s important to equip yourself with the right information on when to actually ask for a credit limit increase. This largely boils down to timing; get it right and expect to be approved without any fuss.
When is the right time to ask?
- When you’re earning more money. You may be earning more money now than when you first obtained your credit card. More money means you can cover higher credit card expenses. After a raise, ask for a credit limit increase from your issuer. Take note that you may have to provide proof of income before getting approved.
- When you have excellent credit. Lenders will feel more confident in increasing your credit limit if you have good credit. This shows how responsible you are with borrowed money. Even if you increase your credit card expenses, you are more likely to pay on time. According to Better Credit Blog, it’s important to remember that good credit doesn’t necessarily equate to good financial health, but most creditors link these two qualities.
- When your credit history is untarnished. Never missed a payment? Haven’t tried maxing out your credit card? If so, then you have a good chance of getting a higher credit limit. It’s also recommended to wait six months to a year before asking for an increase. You’d want to build a good credit history first to show the lender that you’re free from any money troubles.
When is the wrong time to ask?
- When you got rejected elsewhere. You’re not doing yourself any favors if you send out requests for new credit to multiple lenders. This makes lenders think you’re desperate for money. Also, understand that applications for new credit can give you a new credit penalty particularly if you don’t have a lengthy credit history just yet.
- When you’re earning less money. If you’re not earning as much money as you used to, it’s pretty difficult to get approved for a higher credit limit. A decrease in spending power doesn’t help your application. Why would the issuer extend your credit if your ability to cover your expenses has gone down?
- When you don’t have the best credit. A less than stellar credit score might be the reason why you’d get rejected. You may want to build up your credit rating first before requesting an increase.
- When you’re about to travel overseas. It’s interesting to learn that issuers are warier of extending credit to people who will be traveling overseas. The reason is that traveling increases the likelihood of credit card fraud. Moreover, traveling often causes people to spend beyond their means. Consider sending your application once you’re back from your trip.
Increasing your credit limit is a simple procedure, but you need to get the timing right. Be sure to follow the guidelines above to perfectly time your request and get approved right away.