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How to Negotiate for a High Credit Limit

A high credit limit has its own advantages. The first and the most obvious is that you can get more spending power. You will gain the authority to make more purchases, which you probably cannot afford in one swoop. Another is that a high credit limit allows you to be prepared in case emergency situations arise. Car repair and, most importantly, medical bills are very expensive. With a higher limit, you can have a budget for such unforeseen circumstances.

Another significant reason why you should get a credit limit increase is to raise your score. If you are a responsible spender and you have high credit limit, you will have a favorable credit utilization ratio. This is one of the most crucial factors used in determining your score. This ratio is the total amount that you may borrow versus the credit that you have.

If you would like to get a high credit limit, all you need to do is ask. Call your issuer and request for an increase. However, don’t expect that they would say “yes” to your request immediately. If you have set your mind to acquiring a higher spending limit, though, here are the steps on how to negotiate for a limit hike:

Step 1: Abide by the rules.

When you apply for a card, you sign a contract, stating that you will do your best to be a responsible spender and payer. Stick to the guidelines and make sure that you understand the terms and conditions presented to you by your creditor. This is a surefire technique that will let you get your hands on a higher credit limit. Don’t give your creditor an excuse not to approve your request.

Step 2: Demonstrate your creditworthiness.

You should be a good borrower not only on your creditor but also on your other lines of credit. If you have other credit cards from another issuer, you should also prove your creditworthiness to them. The same thing goes to your other loans, such as car and personal loans or mortgages. You should also pay your utility bills on time to have a more appealing payment track record.

Step 3: Use your card at least once monthly.

Many people are afraid to use their card. This is not the way to go if you are seeking for a credit limit increase. Make sure that you use your card frequently or at least once every month. Then, pay off your balances as soon as you can, preferably days before the due date.

Step 4: Ask for the increase.

Finally, here you are. Call your credit card issuer and request for the limit hike. Talk to the right person and don’t forget to state how good you are as a customer , especially if you have been a customer for about a year. Many card companies value their loyal customers so be sure to point that out as well. As a tip, you can avoid hassles by asking for a small increase. Don’t jump to hundreds of dollars as you probably won’t get approved.

Follow the steps above when negotiating with your credit card issuer to guarantee approval for your request for credit limit increase.


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