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Requesting Credit Line Increases

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?