Q: "I’ve got a good credit score, a good job, and I always pay my bills on time. But I keep hearing how hard it is to up your credit card limit. With the holidays coming, that’s something I might want to do. Got any ideas?" – T.N., Nashville, Tenn.
A. It’s up to you if you want to raise your credit card limits – but we really hope you know what you’re doing. By hiking your card limit, you’re raising the risks that you’ll fall behind on your card payments. That’s one of the fastest ways to financial calamity, so be forewarned.
But since you asked, there are some concrete steps to take to get that limit expanded upward, even though card companies are busy trying to reduce card limits on millions of customers right now. That’s because card issuers are casting a wider net over what they consider “credit risks,” or customers who may not pay their bills. The higher a risky consumer’s credit limit is, the more money credit card companies stand to lose.
Still, that doesn’t sound like you. According to figures from Fair Isaacs, you’re probably one of those “plastic patriots” who don’t use your card much, and don’t use much of your credit limit, either. FICO estimates that the typical consumer has an approximately $19,000 credit limit, with only one in seven consumers using 80% of their card limit. The other six represent the tens of millions of card customers who saw their credit limits slashed last year.
If you are one of these occasional users, there are a few things you can do to get your credit limit back up.
Start by gathering all of your card data before you approach your credit card company. Include your current credit score (because they’ll definitely pull that); and gather statements over the past six months. This is most easily done by signing up for online access to your account, but paper statements will do in a pinch. To get a free copy of that credit score, visit AnnualCreditReort.com.