You’ve thought of asking for a credit limit increase. Who wouldn’t love a little extra spending power?
Credit cards can be an excellent financial tool when used correctly. They can help build your credit score with on-time payments and if you have the right card, you can really rack up some bonus points!
When it comes to asking for a credit limit increase, it’s all about the timing.
With a little prep work, you can increase your chances for approval.
When to Ask for a Credit Limit Increase:
Improved Credit Score
Has your credit score improved by leaps and bounds? Over time, a significant credit score improvement will help your chances for an increased credit limit. You can track your credit score on sites like CreditKarma. A significantly improved credit score is one indicator the timing may be right.
Increased Income
Did you land a higher paying job? Finally get that promotion? If you’ve had a strong boost in your household income, this is another sign the timing may be right. Your credit issuer could reward your higher income with a higher credit limit.
Paying Off Debt
Have you recently paid off old, outstanding debts that have been hanging around? If so, this shows your card issuer you’ve been practicing financial responsibility, and you may be ready to take on a higher credit limit.
Responsible Credit Usage
The average person has 3 or 4 active credit cards. If you’re using those cards responsibly by keeping your credit utilization low and making payments on time, this is also an indicator you may be ready for a credit limit increase. If you’ve been thinking about adding another credit card to your arsenal, avoid applying for a new card before requesting a credit limit increase. Opening an additional account can have a negative impact on your credit score.
Now that you know when it’s the right time to ask for a credit limit increase, you may want to know when conditions aren’t so ideal when it comes to asking for a credit limit increase.
When Not to Ask for a Credit Limit Increase:
Decreased Income
Life happens and sometimes you face challenges such as a layoff or job switch. When your income is reduced, the timing is not right for a limit increase.
Bad Credit
When you have a bad credit score (less than 580) there’s less of chance you’ll receive a higher credit limit. Additionally, requesting a credit limit increase can result in a hard pull of your credit which can lower your score even further. It’s recommended you focus on raising your credit score before asking for a credit increase.
Maxed Out Cards
Carrying a balance near your existing credit limit is a possible indication to your card issuer you may bury yourself further in debt. It’s a good idea to pay off as much debt as possible before asking to raise your credit limit.
A credit limit increase request may cause a small dip in your credit score, but approval can provide a long term score boost! If the timing is right and you’re confident you won’t overspend with your newfound financial power, go ahead and ask for that increase!
If you’re a St. Paul Federal Platinum Rewards Visa card holder, you can reach out for a credit limit increase by calling the number on the back of your card or simply click here to fill out our Credit Card application and choose Limit Increase in the Request Type field.
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