Sunday, April 29, 2012

Credit Limit Changes Are Not That Hard To Obtain

Many people contact credit card issuers and banks asking about an upgrade on the credit limit of their credit cards due to several reasons. Increasing your credit limit is not as difficult as it may seem. Though most lending institutions and banks do not have a specific policy for credit increments, it is always a matter of negotiation and as long as you prove yourself credit worthy, then, there should not be a problem to make them draw the line a bit higher.

Credit Limit: The Concept

The credit limit is the maximum amount of money you can use on your credit card. Depending on the credit card product, this may be calculated in different ways but usually there is either a single credit limit that includes purchases, withdrawals, balance transfers, fees, charges, etc. or separate and different credit limits for each category.

Though the limit is a fixed figure, it may be more or less flexible depending on the company's good will. For instance, there are credit card issuers that let you exceed the limit by up to without consequences and after that amount they may charge a small penalty fee. But there are companies that are not that flexible and just by exceeding the credit limit for a few cents you incur in high penalty fees and administrative costs. Most issuers have an additional limit that triggers rejection of your credit card if you surpass it.

Get Informed First

Did you ask your credit card issuer whether there is any kind of procedure to get a credit limit increment? Sometimes the obvious is the way to go. You should contact your credit card issuer and inquire about credit limit raises. If there is no particular policy they will tell you so and you will not lose anything just by asking.

If they provide you with the information, you will be able to know whether you meet the requirements for a credit limit increase or not. And even if you do not, you can begin working on improving your credit or income so you can meet the requirements within a short period of time.

Keep a Clean Credit History

If you want a credit limit increase on your credit card it is important that you pay the balance on time always. No late payments will guarantee you a better chance at obtaining the increase. Moreover, you will need to keep a clean credit history not only on your credit card payments but also on all your debt payments. Only a clean credit report will allow you a credit limit improvement. Bad credit applicant's usually get low credit limits.

The Income Requirement

Another important issue is your income. Truth is that higher credit limits imply higher balance payments in general and that means that the credit card issuer will want to make sure that you will be able to afford those payments. Therefore, proof of income is a must when you want a credit limit change. If you have the same income than back then when you applied for the credit card, the odds are against you.

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