Credit Tips: Tips on how to get a credit card credit line increase

Posted On: November 1, 2005

Author: Board Monitor
Posted: Mon Jul 11, 2005 12:12 pm
Post subject: Tips on how to get a credit card credit line increase

I’ve yet to see this answered, presented with two options. for example you have a visa card, you want a increase, do you ask for it, with some leeway, meaning if the card is five thousand and you’ve used 4500.00, does the company realize, you might be “hurting” and they don’t want to take a chance or do you figure its best to go for a increase when you have lots of “breathing” room. or!

if the card-issuer offers both visa and mastercard, is it best to just apply for the one you don’t have? my question still remains, if you received say 5 thousand opening credit, and nothing changed, why would the company increase your credit. thanks!
_________________
Best Regards,
Curtis Arnold
Board Monitor
http://www.cardratings.com
(501) 663-0314

Author: Alexis Rios
Posted: Mon Jul 11, 2005 12:41 pm
Post subject: Tips on how to get a credit card credit line increase

I’ve yet to see this answered, presented with two options. for example you have a visa card, you want a increase, do you ask for it, with some leeway, meaning if the card is five thousand and you’ve used 4500.00, does the company realize, you might be “hurting” and they don’t want to take a chance or do you figure its best to go for a increase when you have lots of “breathing” room. or!

if the card-issuer offers both visa and mastercard, is it best to just apply for the one you don’t have? my question still remains, if you received say 5 thousand opening credit, and nothing changed, why would the company increase your credit. thanks!

try to increase your credit limit ,as much as you can. You may need to double their credit limit to avoid a drop of your score. If your debt is over 50% of your credit limit , generally will drop your credit score. Or you’ll apply a new card with a different card issuer no matter if the card is a Visa or MasterCard with the best APR , and transfer at least half of your debt to the new card.

Author: hdporter
Posted: Thu Jul 14, 2005 9:08 am
Post subject: Tips on how to get a credit card credit line increase

I’ll add to Alexis’ strong advice:

From the standpoint of FICO, you’re best off obtaining an increase to your current account. Outstanding balance on the account isn’t nearly as strong a factor as payment history. A spotless record will provide them with confidence to extend an increase. But even more significantly, if you periodically make large payments against your balance (say $1000-$1500 on a $5000 balance), even if you charge the card right up again, the issuer is more likely to grant a large credit limit increase. If you only have a record of paying no more than $500 against a $5000 balance, and typically pay $200 or less, they’ll be far more cautious in extending an increase. As Alexis’ notes, ideally you want to achieve a limit on the account that is at least double the maximum balance you carry (50% utilization). 40% is much better yet, and 30% utilization or less ideal.

Oddly enough, while issuers can be stingy with limit increases, they tend to be quite liberal when new accounts are opened. In this case of a Citi account I have, they responded to a limit increase earlier this year with a modest $1000 increase. However, they just opened up a second account with a $6000 limit … go figure.

So, opening a second account generally has greater prospect for larger credit availability. But I’d strongly recommend applying with a second creditor for the new account. This has the advantage of allowing you to transfer a portion of the existing balance onto the new account (usually at a temporary low promotional rate) and reduce overall utilization on each of the two cards.

If you obtain a second card from your existing issuer, they usually won’t allow you to transfer a portion of your existing balance over to the new card, still leaving you with a high utilization on the original card that may be cutting your FICO down a good notch or two.

Author: Daniel
Posted: Sat Jul 16, 2005 10:06 am
Post subject: Tips on how to get a credit card credit line increase

Some good advice above
I would take the opportunity to add as an additional credit building strategy another approach.

While opening a second account and preferably combing to the existing one is a fabulous approach it can also be effective to contact the creditor and ask for a line increase for a much larger line than what the auto increase might be.

This is most effective when you have an account at xxx bank that is substantially higher than the bank you are calling e.g. xx1 has a $25,000 line xx2 has a $10,000 line
You call xx2 and tell them how much you love their card buy xx1 gives me $25,000 will you match or better yet exceed it.

You’re asking them to match a competitor’s line to earn your business; yes it will cost you a hard pull but it has the benefit of not having a new account reduce your average age of accounts for FICO scoring and the creditor is also a winner in competing for your business.