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12
JUN
2006

Get More Credit – 5 Tips to Gaining a Higher Credit Limit

If you are a credit card holder, like most others you would probably like to have a higher credit limit. It would enable you to make more and more purchases that you would not be able to afford to in one go. More importantly, though, a higher credit limit can come in very handy when something unexpected crops up such as a car repair that you have not budgeted for. So how to go about getting a higher credit limit? One method would be simply to ask your issuer to increase, however, they are unlikely to accept. They will increase you credit limit if they feel that you have proved to be reliable. Using an analogy, if you were to borrow money from a friend and not pay him back for a long time or be very inconsistent with your payments you would need some nerve to ask him for even more money. The same applies with credit card companies and banks. Below are 5 top tips to obtaining a higher credit limit:

1. You must abide by the terms and conditions issued by the bank or credit card company. They want to give you a higher credit limit so don’t give them an excuse not to.

2. Prove your credit worthiness not only to the credit card issuer but with any other credit you have such as mortgages, personal loans and car finance packages. Defaulting on any of these would certainly dissuade the bank from increasing your credit limit.

3. Use your credit card on a regular basis. Rather than paying with your debit card for everyday things, use your credit card then immediately pay it off. Regular usage and consistent repayments will allow the bank to build a more complete picture of your habits than if you just use it for emergency purchases. This will make it easier for them to decide if you should have a higher credit limit.

4. Make more than the minimum repayments each month. A higher credit limit goes means potentially larger minimum repayment amounts. It follows that if the issuer sees you are only able to make the minimum payment then it doesn’t make sense to increase your credit limit.

5. Avoid making late payments. This is primarily due to the late payment fee that will be applied to your account but also because every late payment will count as a point against you in your bid to get a higher credit limit.

Treating your credit card with the utmost respect and spending wisely is the best way to gain a higher credit limit. Even more importantly, if you do manage to get a higher credit limit is not to get carried away with spending that you cannot afford to pay back. This is where a long and unpleasant cycle of debt can begin.

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