Why Keeps My Credit Line Growing With My Credit Card Issuer

Dec 18, 2023 By Triston Martin

Your credit card company may occasionally send you a letter praising your excellent account management and extending an offer to raise your credit limit. It's possible this isn't even an "offer" but rather an automatic raise with no further action required. In other cases, the message will state that you must first submit a formal request for the raise.

Indicators of a successful credit line increase

You have made good use of the credit available to you. A pre-existing mechanism on your credit card allows you to request a larger credit limit. Your income has risen, as you have stated. The card issuer might benefit from this from a retention standpoint. The credit card company wants you to use its product to raise interest charges.

Your current credit line has been used prudently.

You carefully use your credit card, staying away from debt whenever feasible. The credit card bills are always paid on time by you. A larger credit limit could be awarded to you automatically or made available at your request by your credit card company as compensation. The increase could be negligible, or it could be as much as 30%.

The unexpected arrival of the news should not cause alarm. In reality, this shows responsible credit card use. The card issuer now sees you as a low-risk customer.

Increasing your credit limit is as simple as calling customer service or logging into your account online.

If you make a particular number of payments on time, some credit cards, like those made for those with fair credit, will increase your credit limit. After some time has passed, others will evaluate your position automatically to determine if you qualify. For instance, your credit limit will be reviewed after as little as six months of having the Capital One Platinum Credit Card. Also, after seven months of responsible card use with the Discover it® Secured Credit Card, Discover will evaluate your account to see if you qualify for an upgrade to an unsecured credit card and return your security deposit.

Your income has risen, as you stated.

Your credit card issuer will consider your salary when deciding how much of a credit line to give you.

You can request a higher credit limit from the card issuer if your income increases after receiving the card. You may obtain a notification from the issuer asking you to verify your current income level.

Should You Inform Your Credit Card Company About Any Changes in Your Income?

You are not obligated to update your income information after applying for a new card or if you are not requesting a credit limit increase and would want to keep it secret. Competition among credit card providers is intense.

To maximize profits, card issuers naturally aim for many active cardholder accounts. Raising your credit limit is just one more perk of keeping your card. If they can help, issuers would prefer you not to switch cards.

The credit card company is gambling that you will incur a balance and charge it monthly.

Even though many credit cards have yearly fees and other services that bring in money, the best-case scenario for a bank is if you consistently carry a balance. Banks love you if they can make money from you by charging you interest, let alone a high rate, because they know you will eventually pay off the sum in full.

Tips for Requesting a Higher Credit Limit

What does this mean for your credit rating? Requesting an increase in your credit limit may cause a hard inquiry, which can temporarily reduce your credit ratings. Suppose you want to start that dialogue with your credit card company. In that case, you should first learn the company's stance on the matter and time your request carefully so that it doesn't influence any other credit card or loan applications you may be working on.

What changes, if any, in your spending patterns may you experience if your limit were raised?

An increased credit line can be useful if you continue making the same monthly payments and use the money in the same ways you always have. You'll start utilizing less of your available credit or usage. Keeping your credit utilization low positively affects your credit ratings over time. However, if you charge more than you can afford to pay off each month, a larger limit may tempt you to spend more than you should.

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