海角大神

It may seem to some people that their credit limit doesn鈥檛 take them as far as it used to 鈥� especially with the price of everyday goods and services keeps increasing. It is natural, therefore, for the thought of calling up a bank and asking for a higher credit limit has entered the thoughts of many people. At first, the task may seem intimidating. Will they ask questions? Do you need to have anything prepared? What are the chances your request will be accepted? While it's always good to be prepared, you can relax. The process of asking for more credit is actually pretty straightforward. There are certain steps you can take to be better prepared for your conversation with the banker. We go over the processes below.

Ask Yourself The Following

• Are you earning more?聽Your credit limit is, in part, decided by your ability to pay back the loan. A bank wants to know that you can pay it back, even in the event that you max out your聽. Therefore, the bigger the credit line, the bigger their confidence in your financial stability. Your card issuer may have asked you for your current income level when you first applied. Depending on when that was, you may have started earning more money 鈥� whether it鈥檚 through a new job or a raise. Communicate that information to the customer service representatives when you call asking for a higher limit. It only makes sense that the higher income should result in greater purchasing power.
• Is your credit score higher?聽Besides income, the other major factor that determined your original credit cap was your credit history. Now that some time passed you can have the bank re-evaluate you. They may run a hard or soft credit pull on your credit account to do so. As long as you have been paying your bills on time, and haven鈥檛 had any negative marks added to your report, your overall credit rating has gone up. The national average is around聽, for FICO 8 scores. The higher your score, the more likely you are to get a higher credit line.
• Can you move around limits from other accounts?聽It鈥檚 not uncommon for people to have multiple credit cards with the same bank. In some cases, some of those credit cards are no longer being used. If that鈥檚 the case, and you want a higher credit limit on a credit card you do use, ask the bank to shift around the credit line. For example, you may have a $1,000 line of credit with Card A and another $1,000 with Card B. If you reduce Card B by $500, you鈥檒l be able to increase the limit on Card A by that same amount. In the bank鈥檚 eyes, their net exposure on your account remains the same 鈥� your total limit with them remains $2,000.
• How much do you want your credit limit to be increased?聽When you speak to a bank representative about raising your credit line, they will ask you how much you鈥檇 like it to be increased by. Have an answer prepared. In general, you should ask for a higher limit than you actually want. It鈥檚 good to have a large credit limit, even if you don鈥檛 use all of it 鈥� it may help your credit score in the long run. Some credit score models take into account credit utilization to determine your score. This is the percentage of your total available credit you use up month-to-month. As a rule of thumb, it鈥檚 generally advised to keep this figure below 30%. Having a larger credit limit will help you keep your overall credit utilization now.

A Warning About Overspending

Before you choose to increase your credit line, be mindful of the dangers it invites. Oftentimes, people confuse their credit limit with their spending limit. This can potentially cause individuals to go over budget and buy things they wouldn鈥檛 otherwise get. If you choose to increase your credit limit, always remember to be careful about what you charge to the card. You shouldn鈥檛 get a higher credit line with the intention to buy things you can鈥檛 afford. Interest charges can quickly snowball out of control, and they aren鈥檛 something to be taken lightly. The average APR on credit cards in the U.S. stands at around聽. Once you begin carrying a balance and the interest charges begin to pile on it can be difficult to break out of the cycle. The average U.S. consumer is approximately聽聽in the hole due to credit card debt. Make sure you鈥檙e using your card responsibly, if you wish to avoid a similar fate.

This story originally appeared on .