hi. my name is john ulzheimer, and i'm acredit expert who contributes to creditcardinsider.com. today's question is very simple... how can i raise thecredit limit on my credit card? it's an excellent question because a lot ofpeople over the time of using a creditcard become
Us Bank Secured Credit Card, either, very used to using it, they benefit from using it, some people become dependent on using it which is a little dangerous. but they also wouldlike to have a higher credit limit because of the benefit you getin your credit score by having a higher credit limit relative to your balance. and so it's very nice to have a very high credit limit
on your card even though you never intend to use theentire amount. so the question is well how in the world can i raise the credit limit on my card? so there's a couple of ways you can do this. one is a shorter-term strategy, and one is a longer-term strategy. the short term strategy is ask them toincrease the credit limit. i know that sounds very simple. and you probably didn't need me someone to tell you to do that. you probably could have figured thatout by yourself. but let me explain what happens when you do that. let me explain the moving parts kinda behind-the-scene. all credit card issuers, especially thefront line customer service people
have some degree of flexibility withrespect to the credit limits on your card. meaning that if you have a $10,000 credit limit or a $20,000 credit limit and you want a higher one, then you can call the front line customerservice people and simply ask them "hey can you increase my credit limit?" and most of them have the flexibility and are empowered to increase it but only by a small amount $500, $750, maybe a $1,000. but that's going to be about it. anything above that is essentially you applying for credit,because if you're asking for a
considerable increase in the limit, that's different than what you got when you opened the account. so essentiallythey're going to have to go through the underwriting process again to approve you at the new higher limitand that's going to mean that you willessentially apply. you can do it over the phone verbally. you're applying for a much likehigher credit and guess what's going to happen next? they're going to pull your credit report.
they're going to pull your credit score. and they're going to use that type of information to determine whether or not you have earned that considerably higher credit limit or not. now, a lot of people like to avoid that scenario because of the potential impact on the credit score whenyou apply for new credit with a credit card even if it's just a credit limit increase, it can end up with an inquiry on one of your credit reports and thatcan be problematic all be it minimal. okay. so at least be aware of that. but i wouldn't not do it simply because of that. so that's the short term strategy. i wouldn't expect
you to be able to turn $5,000 credit limit into a $10,000 credit limit with that strategy, i wouldn't. i would expect you to be able toturn a $5,000 credit limit into a $5,500 credit limit using that strategy. but still, you know, it's better than a stick in the eye and it was free, and the phone call didn't take very long, and you got a higher credit limit out of it. the longer term strategy increasing your credit limit is essentially, it's very organic... you're doing nothing but using the card,
paying it in full. and over time the credit card issuer will see that you are a good customer, meaning that you pay your bills on time. you have never gone into default. they'venever had to chase you down for payment and if you're using the card a lot yourgenerating a slight fee income or interchange income for the bank. if you're carrying a balance from month tomonth that's not a good thing because then now you're paying interest. but from the banks perspective that is a good thing because
they're earning revenue out of that. by doing that and paying the card on time over years, they're going to increaseyour credit limit periodically simply to either reward you or entice you to use the card more and so it's not uncommon for a card to be open with a $10,000 limit and then a few years later the card all of a sudden has a $20,000 limit because of your usage patterns. so those are a couple of strategies forincreasing your credit limit; one very
short term but minimal. and one much longer term but you're gonna get much more out of it. so if you have any other questionspertaining to credit or financial topics please submit them to creditcardinsider.com. thanks for watching and have agood day!
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