Credit Card FAQ
How Do I Ask for a Higher Limit on my Credit Card?
Credit card limits are amounts that are usually set before you commit yourself to a particular credit card merchant. The limits have been designed as an amount which you can spend without having to pay back until the end of the month. The only catch is that you are expected to make the repayment with interest seeing as you have taken out a short term loan. The amount of limit that you are given from your credit card company is known to vary depending on a number of factors. Some of the factors are known to include your current credit rating and past history of credit cards.
Asking for a higher limit on your credit card has a lot to do with some of the factors that have been mentioned above. Say for example that you have applied for your very first credit card after graduating from university and getting a brand new job. Seeing as you would not have much of a credit rating file under your name, the chances are that your credit card company will set a low credit limit. The reason why credit card companies are required to set a limit in the first place is to protect them selves. Credit limits are a short term loan that we take from our credit card merchants which we agree to pay back at the end of each month with interest.
In a number of cases, many people have been known to be given lenient credit limits which they could not afford to pay even in the long run. In such cases, the person that ends up taking the loss is the credit card companies themselves. There are two ways in which one can increase their credit card limit. The first way is that the credit card company themselves increase your credit limit as long as you keep up to date with payments on a regular basis. Sticking to the above example of a freshly graduated student with a starting credit limit of $1000, say he or she is able to maintain a good credit rating by keeping up with his or her payments for a six month period. In such a case, the likelihood is that the bank will send him or her a letter stating that his or her credit limit has been extended to $2500.
The other way by which a person can extend their credit limit is by sending in an application to the credit card company. This approach is slightly more difficult to go through as in most cases; the limit that has already been set for your card in the first place is solely based on your previous credit reports. If your credit report ratings are quite low, then the chances of you getting a higher credit limit granted are quite scarce.
Before you decide to go for the second approach, it would be considered a good idea that you find some way to improve your over all credit rating. This in effect will give you a much better chance of your application being granted for a higher credit limit on your credit card.
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