4 Steps to Take When Asking for A Credit Limit Increase

Credit cards have a set balance because the creditors need to ensure that a borrower does not sink themselves into debt or hurt their credit score. But with the holidays right around the corner, you may be looking into getting a credit limit increase. It is possible to add more to your credit limit, but this is a process you should take your time considering. Following these four steps will help you decide whether a credit limit increase is right for you:

Look at your finances
Before you decide to ask your creditor for a limit increase, you should decide if you really need it. You should only ask for a boost if you can fully pay your balance every month. If your finances are already tight and you have trouble paying bills as it is, this option may not be right for you.

You should also take the state of your credit into account as well. Run a credit report – you are allowed one free credit report a year from each credit bureau – and see if your credit is in good standing. Credit providers will avoid giving a limit increase if a credit report shows they have not made payments on time. If you have had too many blemishes on your record, you may want to spend time improving your credit before asking for a limit increase.

Pick the right time
If you have decided that a limit increase suits you and you are prepared for the responsibilities, it is time to ask your creditor for the go-ahead, but be careful how you ask. Requesting a credit increase within six months of getting a card will likely be turned down, so it would be wise to take your time when asking your creditor.

Don't ask for the moon
As you ask for an increase, it pays to be conservative. Chances are if you ask for a $5,000 increase out of the gate, you will be shot down immediately. Asking for too much right away can result in you getting turned down and future requests will also be quickly turned down. A good range to ask for is between 10 and 25 percent of your balance. This is a moderate range that will be less likely in getting turned down.

Good reason to ask
Asking for an increase with concrete reasons may help your case. When negotiating with the credit provider, highlight your history with the card company and mention any good points with the company such as on time payments. Building a good case to ask your creditor for an increase can result in a smoother process.