Tips for increasing credit limit

The maximum amount that is provided on your credit card is a credit limit. This purchase limit is set by the bank based on multiple factors such as annual income, current debt, employment status, credit history, credit score and other factors.        

To increase your purchasing limit you need a higher credit limit. 

Your first credit card may be issued with less credit limit. You can increase your credit limit by following these tips. 

Apply for new credit card

If you are already using a credit card apply for a new credit card asking for an increase in credit limit. 

Sometimes individual cards can have their own credit limit cap depending upon demographics such as the population size, age structure, density and other factors.

Select a credit card issuing lender, apply and get your new card. You can also reallocate your credit limit with a credit card you wanted to increase and cancel the credit card which you do not want to use.

It is not possible to reallocate the credit limit between personal credit cards and business credit cards. 

You can neither reallocate credit limits between any credit card and charge card. A charge card is a type of credit card with no credit limits.

Maximise your credit score

A maximum credit score provides you a good opportunity to increase your credit limit. A higher credit score means a higher credit limit. 

Use your credit card balances less than 30 percent of your total credit limit.

Click here to know How to improve your credit score? 

Request for an increase in credit limit

You can request your card issuer for an increase in the credit limit. Banks do not mind increasing your credit limit. 

They want to assure themselves that you utilise the credit limit and repay the credit amount on time. 

The credit card issuers provide a facility to request an increase in credit limit through the online process. 

You can also call your credit card issuer and ask for an increase in credit limit. 

Gather your supporting documents such as payslips and keep them ready. Once bank requests you can submit them for verification. 

Bank inquiries on your credit reports look at your credit history and approve your request.

Click here to know What you should know before increasing your credit Card Limit?

Do not request too much

Do not plead for an increase in credit limit. If you think that you can empathize your lender with your stories and get an increase in credit limit then you’re wrong.    

Let the credit card issuer know that you deserve an increase in credit limit. 

Show them that you deserve a credit limit increase for the following reasons. 

  1. You never missed a payment and you have been a loyal customer. 
  2. You have always paid a credit card bill in full every month.
  3. You have always made on-time payments
  4. Your credit card utilisation was thirty percent or less 
  5. You made monthly credit card payments more than the minimum balance. 

Do not be arrogant or threaten or do not take your financial frustration on the credit card issuer. It is a rude way to convey and they will not help you out. 

Always remember Credit limits will not be increased until you achieve the desired level of credit score.

Don’t be greedy 

Do not be greedy by asking too much of the credit. It raises a red flag if you’re asking for too much of credit limit increase. 

If you’re raising this red flag. You will be outrightly denied the credit limit raise. You have to wait for a few more months to reapply for a credit limit increase.  

Do not ask credit card issuers how much the amount will be increased on credit card. Credit card issuers will not disclose this information to you. 

Balance transfer from one credit card to another

Transferring your balance from one credit card to another credit card is a balance transfer. Many credit card issuers offer zero percent interest for a certain period on transfer. 

If you move your balance from Card X to Card Y, there is an interest-free period provided by the bank on transfer. 

You can save money on the transferred card and also increase your credit limit on that specific card. 

This provides a facility for improving your credit card utilization on that specific card.

Click here to know Balance transfer in UAE

Minimise the number of accounts

Minimize the number of credit card accounts with balances that you have opened with different lenders. When reviewing your application form the credit card issuer looks into the different accounts you hold. 

Having unpaid balances on different cards can signal financial distress. While reviewing your application, banks will look not only into credit scores but also look at how you manage your credit card accounts. 

Other general guidelines on increasing your credit card limits are as follows

  1. Use your credit card regularly to pay your bills and repay on time, the bank will increase the credit limit automatically on your card. 
  2. Once there is an increase in salary contact your bank with payslips and request for a credit card upgrade. You can also request an increase in credit limit. 
  3. You can raise a request online or visit the bank branch and request to increase the credit limit. Based on your history of transactions banks may increase the credit limit.
  4. Report your income accurately while filling the application form. The credit card issuer will increase credit limits. Remember bank will ask for proofs and do the verification.
  5. If you are using a credit card, hold on with patience and wait, the bank will increase automatically you need to have patience. 

Take away

There are no hard and fast rules on how to increase your credit limit. Credit card users who have a good credit history receive more credit limit than they expect. Hence it can be said that credit card limits can be increased only with high credit score and good credit history.

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Vinay Kumar
Vinay Kumar Goguru is a finance professional with more than 8 years of diverse experience as a researcher, instructor and Industry work experience with both public and private entities. Prior to MyMoneySouq, he spent 6 years in Berkadia, It's a commercial mortgage banking company. He has a "Doctoral Degree in Commerce" and two master's degrees with a specialization in Finance, one as Master of Commerce and other as Master of Business Administration. He has written several articles on personal finance, published by different International journals. He loves traveling, reading and writing is his passion. He has a dream of writing a book on his favorite finance topics.

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