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Requesting Credit Line Increases

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Every six months or so (I just do it whenever I remember), I pop into a few of my accounts and request a credit line increase. Why? I know that I don’t need the additional credit but I still ask for it because now is when they’re most likely to grant me a credit line increase. Banks usually won’t give you money when you actually need it, it’s a paradox! Well, most credit card companies will not entertain the notion of an increase within the first six or first twelve months because they’ve given you all they’re comfortable with and won’t even consider increasing it… yet. If you even try requesting one from a newly minted card, you’ll be greeted with a message to come back later. But, after you leave credit limit purgatory… the sky’s the limit and you should try to soar.

Once you’ve made it out of the no-increase period, requesting an increase is easier at some companies than others. Citi and American Express will both allow you to increase your credit line entirely online whereas Discover will force you to call their 800 number and talk to a human being. Now, when you go to request an increase, prior to entering any information, the company may offer you a small increase. This isn’t meant to placate you, this is because they planned on increasing it some amount in the near future and since you asked, they’ll just give it to you now. I always accept this increase because it comes without any pull of your credit history.

If they don’t offer that, they will request some income and debt information, then respond in 2-4 weeks after a human being reviews the information. The information they usually will request is:

  1. Amount of increase
  2. Current employer and time with the employer
  3. Current income
  4. Current rent/mortgage payment and time at the residence

If they ask for info, I skip it because it’ll come with a hard inquiry.

Are there drawbacks to requesting credit line increases? I don’t think so because the limited liability in effect on every one of my cards (which everyone should have on their credit cards) makes it difficult to be screwed as a result of a higher limit.

What are the benefits? Well, your credit utilization percentage will go down because your total credit limit is higher; so we’re talking a small increase in your credit score. If you enter in your information though and it requires a pull of your credit, this would be counter-productive. I usually won’t enter information if prompted for this very reason – I don’t need the extra credit, so why take the marginal hit on my credit for it?

Anyone have any thoughts on this, good or bad?

{ 36 comments, please add your thoughts now! }

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36 Responses to “Requesting Credit Line Increases”

  1. Rob Carlson says:

    I completely agree with this philosophy.

    I’m four years into my mortgage and not looking at the prospect of buying a new car for another 5 years or so, so I’m using this opportunity to go on an unsecured credit aquisition binge for me and my wife at the rate of a new card every 3-6 months.

    We’re not going to use any of it, we just want to get them now while the opportunity cost is low and our scores will have time to recover.

    By the time we need another loan, we’ll have a huge amount of decently-aged new credit, a few old “keeper” accounts (credit union VISA, AMEX, etc) low utilization, and years of perfect payment history.

  2. Cleophus says:

    I’ve read that high credit limits/available credit could affect your credit score, even if you have no outstanding balance: i.e., the *potential* that you could rack up a huge balance given your high approved credit line scares other lenders.

    • Anonymous says:

      That is true. Many open cards with high limits are not a good thing, when your looking to purchase a large spendy item. You ask for this increase to help your score and close an account one at a time as your accounts gets closer to zero. Reasoning for asking for limit increase will help your utilization score,and thats a good thing.

      • Much says:

        Yes, that’s true. My ex use to have unbelievable amounts of credit on TONS of cards. She cut the number down to like 20 cards and requested the limit decrease to $5,000 per card. That greatly helped her in the eyes of banking lenders, not that she needed it though.

  3. Rob Carlson says:

    @Cleophus:

    My understanding is that skittishness is typically a function of the age of the accounts, hence the average account age penalty. But I’m not a lender, just a guy with some credit cards.

  4. Golbguru says:

    I have heard people say that high credit limit will affect your credit score. However, I don’t buy that. “The potential” that you could spend huge amounts doesn’t look like a valid point to reduce someone’s credit score especially if that someone has a spotless credit history to date.

    Tough higher credit limit doesn’t harm your credit score, it is possible that some mortgage lenders get nervous looking at your credit limit (I don’t know why they would…but they do it anyways). So people who are looking for mortgage should dig a bit deeper into this before going all out on increasing credit limits.

    Personally, I like to see high credit limits…not because I use any of those but just for my ego satisfaction purposes :) . Typically I use like 3% of my credit limit but it has only improved my credit score over the years.

    • Munch says:

      Sorry, but it is true. See my reply to Cleophus above… There really is such a thing as too much credit. And my ex had spotless credit for decades.

  5. Kelly says:

    I also thought that having too many high limit credit cards could hurt your score. My understanding is that there is a happy medium, enough but not too much. Where that is is anyone’s guess!

  6. Cleophus says:

    Too bad FICO’s (and others’) algorithm for coming up with a person’s credit score is proprietary :-( , or we could have an objective anwer to this!

  7. Bubbers says:

    I disagree with this! Anyone who is trying to get debt under control should not be increasing their capacity to borrow! That is like an alcoholic buying and storing bottles of vodka because they’re on sale.

  8. Frank says:

    Bubbers, I’m pretty sure he’s not advocating that someone increase their credit when they already have problems living within their means.
    Your analogy of the alcoholic works the other way as well. If someone who rarely drinks sees vodka on sale 6 months before a party they are planning, wouldn’t it be in their best interest to buy it then?

  9. Rob Carlson says:

    @Bubbers:

    If a person has fiscal self-control, any strategy that raises their credit score increases their ability to get debt under control by lowering APRs, which can lead to quicker principal repayment. Also, the credit card issuers are more likely to throw out some of those nice no-fee 0% APR for 12 month checks to lure them back in. Used properly, they can be a powerful tool.

  10. Savvy Samurai says:

    Citibank and American Express are cool in that you may get instant credit line increase through their website. If you get the long form that requires a hard-pull then its probably not worth it. Especially if you are planning to apply for new credit cards I would hold off on the request for credit line increase since creditors might see it as too many inquiries and decline your applications.

  11. yelekeri says:

    Savvy,

    Your comments really helped me much. Two weeks back I called Amex to verify whether my credit will be affected if I request for a line increase, he said yes. Then I kept quite.

    But as you mentioned I tried myself online, never came up with anything line of pulling the credit file, so submitted and instantly credit line is increased. thanks a bunch.

    cheers

  12. andy says:

    Hi! I have an American Express credit card. When I applied that credit card, I just have 2000 credit. I have been using that credit card for about 5-6 months. Since I am planning to let my family members to use my credit card, i requested an increase of my credit limit for like 3 times for the past few months. But, they all got denied. My question is that if I request an increase of credit too often, will that hurt my credit score? Thankz!

    • jim says:

      Each one of those requests will likely include a credit request which will negatively affect your score.

    • Anonymous says:

      Never apply for a credit increase until at least 6 months, probably safer with 12. Before 6 months you will be rejected 90% of the time.

  13. john says:

    Do you guys know what can be max limit for a credit card limit? 30k? 50k? or even more?

    Secondly, I have score better than 800, how much my score decrease if I apply a new credit card?

    • Jim says:

      It will probably go down a few points because of the inquiry, as for the limit, I don’t know what the limit is on one card but it would be difficult to get a card with a limit as high as $30k.

    • Dan says:

      There are plenty signature type cards that have limits well in excess of $200k. Amex certainly has given such size limits out as well.

      Once you hit a certain threshold however, you would be required to produce documented income.

  14. Dan says:

    Just a comment about asking for increases.

    I know this article is old but just wanted to give some more recent advice:

    TRY TO STAY LOW

    Depending on the issuer, asking for increases can be a big red flag for your account. Amex recently has been slashing limits on certain consumers asking for too many increases.

    When you ask for an increase at Bank of America, the analyst takes that opportunity to scrutinize your account in full. Many consumers have reported asking for an increase, speaking to an analyst and instead of getting an increase or a flat denial they are getting immediate credit limit reductions and in some cases the analyst flat out says, “sorry we’re closing this account.”

    That’s not to say they are not approving many increases.

    Just try to stay low and only ask for increases if you are doing all the right things(low utilization, increased FICO score etc. etc.)

  15. Jay says:

    I have a question. Made some mistakes last year and had my credit limits decreased. Between November 2008 and February 2009, I paid all balances ($6,500.00) down to $0.00. In January 2009, a month after paying off AMEX, I booked a hotel room online using the account. The next day they sent me an email reducing the limit further to $500.00 (down from $14,000 then $2,100). I use the account for gas and grocery purchases and pay it off every month, as I do with my others. Is it too soon to seek an increase? My credit scored suffered and is now 670. Thanks in advance.

  16. aua868s says:

    earlier i used to automatically find citicard offering me increases in limits in my account page…i had combined my 2 citicards to 1…since then haven’t got a limit increase offer!

  17. Dan1 says:

    I am a new credit card holder… I’m in college and only have a student card for $500. I would like to increase it some but don’t want to hurt my already almost non-existent credit score. What should I do?

    • Sean says:

      Never ask for a credit increase for at least 6 months of getting a new card. You are almost guarenteed to be denied and the inquiry may hurt your credit score. After 6 months you could ask for an increase (although you will probably get increases naturally), but it will probably still hurt your credit score.

      If you are a responsible spender and pay your credit card bills every month I would suggest getting a second credit card. It will hurt your score in the short run, but allow you to build two accounts at once. This will improve your score in the long run by lowering your debt to credit limit ratio and increasing your credit history time (for 2 accounts instead of one).

      If you are not a responsible spender then just stay how you are and wait while your credit limit slowly grows.

  18. lacera says:

    Hi,

    I’m a first time home buyer. The mortgage broker I talked to said that if my credit score was only a little bit higher I could have received a lower interest rate. He recommended me to talk to a consultant. Of course the consultant asked for a good chunk of money. Now I’m wondering if I can get those 4 points with out paying a consultant. I’m thinking of asking for an increase on my Amex credit card limit via online form and paying off the card completely to decrease my credit utilization percentage. Do you think this would be a safe move since online form would not do a hard inquiry?

  19. Hi,

    Question for you…

    I had my AE blue cash card for a long time now, never requested an increase on it. It has a $3600 limit. I’m now doing a ton of traveling for work and have to pay up front, so I thought it would be best to put it on this card. I tried to increase my limit to $20k but was denied. Would it be bad to ask for a more reasonable increase now? Do I need to wait another 6 months before asking to raise it again? I basically have 0% utilization of my cards, as I pay of my balances in full each month.

    • Jim says:

      Someone emailed me the other day because they requested an increase before the six month period. They were denied. He was maybe a week early, so he requested it when the normal six month period would’ve ended and he was approved. I think you should ask for a smaller increase, $20k is too high a jump from $3600.

  20. Stacy says:

    I’ve had credit cards for over twenty years and have always paid them on time. I am needing a little cash about 3k. Who are some of the easiest banks to get cc from. My score mid to high 600s. I can’t ask for increases because I closed these accounts out over a year ago but still making the payments on time.

  21. LP says:

    I have had a credit union Visa card for over ten years, always paid it on time. Just asked for an increase from 10,000 to 50,000 – but now after reading this maybe I should cancel it? I didn’t realize even asking would damage my credit! How ridiculous. Or will it, considering I have been a responsible borrower.

  22. BestPal says:

    LP, let us know if your request ever got approved. Also, to improve utilization % on by increasing available credit, is it better JUST to ask for a new card thru a new company or is it better to have some 3-4K balances on 3 different cards, and then ask for a new card with balance transfers from all of those? Which way will give better chances to get a new credit line?

  23. Joshua says:

    I was just wondering what the general formula was for when you ask for an increase in relations to the actual credit you do have, in order to maximize your chances of getting the increase approved. (And at the same time maximizing the increase in credit. I don’t want to ask for something too safe where I get a measly increase.)
    Is it double the amount of credit that you do have, like the example in Ramit Sethi’s book where you asked for $10,000 from having $5,000 in credit?
    If I currently have a $1,200 limit on a Wells Fargo credit card and a $1,000 limit on a Capital One card and they are both completely paid off, what is the maximum increase that I should ask for?

  24. steffie says:

    Actually I work for AMEX and I always wonder where people get wrong information from when they call and expect results based on nonsense they read online. American Express will do a soft credit pull each time you request to increase your limit! DO NOT CALL IN AND REQUEST AN INCREASE EVERY 6 MONTHS BECAUSE UNLESS THERE IS A SHARP SPIKE IN YOUR CREDIT SCORE, YOU WILL LOOK WORSE EACH TIME YOU ARE DECLINED. Thank you!

  25. Karen says:

    Your credit card payment is not the only thing they will consider whether you are a good paying customer or not. The credit bureau also looks at how you pay your gas bill, your utilities, and even your video rental (because they also go through collections when you fail to hand in a late video). They also look at your income, and how long you’ve been at a job if you want to get approved for a mortgage.

    tip #1: don’t increase limit unless you have to because whenever they have to contact the credit bureau, it hurts your credit rating a little bit.

    tip#2: have a max. of 2 credit cards but not if you have trouble paying it off. if you don’t use them, it’s also bad because you increase your credit limit for no reason.

    source: VISA customer service.


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