Moving the Ceiling

When you open a credit card, the issuer assigns you a spending limit. If you spend above that limit, your card is declined. While over time, your credit limit will increase automatically (if you’re in good standing), there are some perks to asking for a bump on your own. Here’s what you should know.

When to Ask

You’re more likely to get a credit increase if you time it right. Make sure your credit score is high before asking. A high credit score shows the issuer that you are likely to make payments on time and not go over that new, higher limit. You’re also more likely to get a limit increase if you’ve been making timely payments over a long period. Again, it’s all about showing the card issuer that you can handle a new limit.

Why to Ask

As USA Today notes, one of the biggest factors impacting your credit score is your credit utilization ratio. This number reflects the amount of credit you’re using compared to your overall credit limit. You want to keep your ratio at 30 percent or lower. If your utilization ratio is higher, your credit score could suffer. Therefore, one of the benefits of upping your credit limit is that it can lower your credit utilization, which in turn will likely boost your score.

How to Ask

If you’ve decided to ask for a credit limit increase, simply call your issuer or apply online. If you’re denied, don’t fret. You can always ask again when the tinting is better.