Do you need a higher spending limit on your credit card?

There are several reasons to increase the credit limit on your card, even if you don’t plan to spend that extra money. A larger credit line gives you more flexibility in your spending. You don’t have to worry about maxing out the balance and having to pay a penalty. A higher limit can actually improve your credit score by decreasing your debt to available credit ratio. Creditors don’t like it when you are over-extended.



If you have a credit card that gives you cash back, you can earn more money by putting more of your purchases on that card.


A higher credit limit is not without some drawbacks. You will have to exercise self-control when it comes to spending. Just because the credit line is there, doesn’t mean you have to use it.


How to get the lenders to increase your credit line


The best way to increase your spending limit is by improving your credit score. It’s the first thing the lender looks at when calculating your credit line and interest rate. You can raise your credit score by paying your bills on time. As a bonus, you’ll avoid the costly late fees.


Video: How to Increase Your Spending Limit


Use your credit card regularly. Even if you don’t carry a balance on the card, use it instead of cash every chance you get. This tells the lender that you can be trusted to pay the bill each month. People who only use a credit card in an emergency are considered higher risk borrowers because their spending pattern is unknown.


Do not approach the credit limit unless you absolutely have to. If the lender suspects that you are over-extended, they will be reluctant to lend you more money.


Pay more than the minimum each month. This is prudent for several reasons. It can save you a fortune in interest payments. If you only pay a small portion of your balance, it can take years to clear the entire debt. With high-interest credit cards, the balance actually grows faster than what you’re paying. Paying more than the minimum also shows that you are credit-worthy.


If you want a higher credit limit, you have to be a valued customer. Do not pay off the entire balance each month. Leave a little on the card once in a while, even if you have to pay interest on it. Credit card companies make most of their money from interest payments. People who never carry a balance are not valued customers.


Once you’ve done all of the above, the credit card company may automatically increase your spending limit. If they don’t, you can request an increase, either online or over the phone. If they are still reluctant, tell them that you have a better offer from another company. That usually does the trick.


Video: Increase Your Credit Limit While Lowering Your Interest Rate


Keeping yourself in the good graces of your credit card company


Here are a few things you can do to keep yourself in the good graces of your credit card company: