Adding or not increasing your credit limit is the problem. A higher credit limit means you can spend more on your credit card – what's the problem? Before deciding when and how to increase your credit card's credit limit, you should first ask yourself why you want to increase your credit limit. Your creditors will try to answer the same question.

3 reasons to ask for a higher limit (and 3 reasons to make your click pause)

There are many reasons why you may need a higher credit limit, but only a few really good, economically responsible reasons need to be asked. We will tell you some good reasons for asking for a higher limit and why you should be on hold. Check it out and see where you are.

Benefit

More flexible: A higher credit limit makes your expenses more flexible.

Improve your credit score: A higher limit can increase your credit score by lowering your utilization, as long as your spending remains the same. Your credit utilization, which is part of the credit line you use at any given time, is 30% of your FICO credit score. Keep your consumption level the same, the higher the credit limit, the higher your credit score.

Increase your reward: When you control your credit, more consumption flexibility means more rewards. Say hello to better savings!

Negative:

Financial emergencies: If you need more cash, now is not the best time to ask for a credit limit. If you must and are approved, make sure you have a specific repayment plan.

Get more consumer money: If you often overdraw your credit card or work hard to repay, then giving yourself more money (and more potential interest) may not be the best option. Wait until your credit habits are controlled and ask for a higher limit.

Pay off another credit card balance: Your creditors will know your other credit card debts, so your chances of approval will be lower. Try the balance debit card!

If you want a higher credit limit to take advantage of these benefits, then please! If you often find that your credit card is running out, or if you are in a financial crisis, you should press the Pause button.

When to ask for a higher credit limit

Now that you know that you are asking for a credit line for legitimate reasons, it's time to develop a strategy. You can do something to get yourself in the best position to be recognized. If you know what your credit card provider is looking for, you should be able to win it! Here are some of the factors they will consider and what you can do to optimize your approval opportunities.

Credit score

When you ask for a higher credit limit, your credit card provider will conduct a tough credit inquiry to find out how you handle the credit you have earned. (This means your credit score will be temporarily affected.) You will want a good or excellent credit score based on the increase you request. This shows that your creditors, you are already responsible for your credit to date, and will do well in more ways.

Payment history

Another factor your card provider considers is your payment history. If you have a lot of overdue or missed payments on your credit report, you may not be approved to increase. Creditors want you to pay in full and on time. If you can't keep up with it recently, it may not be the best time to ask.

Income/employment

If you have recently had a raise or an extra source of income, now is a good time to ask for a credit limit! This shows that you have extra spending power, which means you can pay higher credit card bills. If you have these three things, you have a good chance to get recognition! Now, the only remaining question is how to actually demand a higher credit limit.

How to increase the credit limit

The exact process depends on your credit card provider, but you can usually ask for an online credit line. Log in to your bank's website to see if there are any options to increase your credit limit! If not, call your bank and find out what the process is, so you can get started. Since you know why, when, and how to increase your credit limit, you can apply (hope!) for approval of the new credit line. Once you are approved, you must spend money responsibly. Use your cap to increase your credit utilization.