If you're just starting out with a credit card, your credit limit is probably low, but you need to increase it to make bigger purchases. Read on to learn how.
Keyword(s): credit limit
Did you apply for a credit card and got approved? Congratulations!
Even if it's a low amount, it's your foot through the door in building your credit.
Buying your dream house or car is that much closer now. Personal loans require good credit, believe it or not.
Of course with a credit card, naturally, you'll want to increase your credit limit.
Having an increased credit card limit comes with not only more money for you to spend, but it makes your credit score look good.
Given that you make your payments on time, that is.
Do you know how to increase your limit?
If not, that's OK. Let's take a look at how you can increase your credit limit.
1. Use Your Card Regularly
You don't have to use your credit card in lieu of your debit card for purchases, but using your card regularly will help you get that credit limit increase.
Consider using your credit card to pay for gas or groceries. These are frequent transactions you'll make and they are manageable.
At the same time, this will show your card issuer that you need the funds.
2. Make Your Payments On Time
Part of the responsibility of having a credit card is making sure you pay your credit card on time.
Or, before your credit card payment is due.
Along with using your card regularly, this will solidify that you can manage the financial responsibility of a credit card.
3. Don't Ask For Too Much Too Soon
This is a balancing game. You don't want to ask for a credit limit increase within the six months of opening your credit card. That'll raise red flags.
And you definitely don't want to ask for too much.
If your limit is $500 and you ask for a $2,000 increase, it's not going to help you.
In fact, it'll raise red flags, too.
4. Be Patient and Your Credit Limit Will Increase
And your credit limit will increase automatically. There's really nothing you need to do on your end. It will just happen.
It's that easy. But, it requires patience.
Issuers review your credit after about six months and if you're eligible, they'll let you know that they're going to increase your credit limit.
This is where that regular use and making your payments on time comes in.
A Word of Caution
This cannot be stressed enough - a credit card is not free money. It's easy to spend but it's not free.
You really are held accountable for what you spend and making payments. The fees won't magically go away - you must pay them.
Always be careful. 38.1% of all households carry some sort of credit card debt. Don't let yours get out of control.
Your Credit Limit Increase
What do you think of automatic credit limit increases? Do you prefer them? Or would you rather inquire about an increase?
What method do you find most effective? Share them with us!