Credit Card Enhancement Letter: How to apply for increasing credit limit

We will begin with a short checklist. If you can tick them off before you write an application letter to increase your credit card limit, chances of approval will be higher. So, what are they?

The most important factor behind a successful credit limit enhancement application is regularity and discipline in paying off credit card debts for at least last six months, if not the whole year. If you have been paying your credit card bills on time for last one year, without any fines or late payment charges, chances are that your credit score (as well as dynamic credit limit) is high or satisfactory. You simply must have a good credit history before you should even think of applying for credit card limit increase: both for a faster approval as well as your own financial health.

As an Indian, you are obviously familiar with a popular etiquette: when you pay someone a visit, do not consume every food they offer. Having some food left on your plate is a good gesture. The same applies for your credit as well. If you eat up all the credit you are offered, your credit score will go down proportionately. For example, if you have a credit limit of fifty thousand rupees on your credit card, and your debt is around forty or forty-five, you have an extremely high credit utilization level. Your debt to limit ratio should be a maximum of twenty to thirty percent; in other words, if you are offered a credit limit of fifty thousand rupees try to keep your debt within ten to fifteen. Sharing your debt between multiple credit cards to lower this ratio may be a good technique, if you can craftily handle them all. Having around ten percent credit utilization level is often a surefire way to get your credit card limit enhancement application approved!

Do a quick search on your bank's website whether they offer to download credit card limit enhancement form in PDF or DOC format. If not, visit the branch and ask for a hardcopy. Most banks in India have their own pre-formatted credit card limit enhancement form for download (SBI, HDFC, Axis, ICICI etc.) where you just have to put the relevant information and submit it to the bank. If there is no such form in place, only then you have to write a letter yourself. Here we have provided a sample credit card limit increase letter to bank manager for your reference. However, please note that this is a model credit limit enhancement letter and different banks may require different write-ups; you should always seek advice from the officials regarding this.


6 Ways to Increase Your Credit Limit

A good credit score plays a key role in your financial well-being. The better it is, the easier it is for you to qualify for a mortgage or car and student loans. An easy way to increase your credit rating is to get a higher spending limit on your credit card. Fox Business writes that by lowering your credit utilization ratio, which is the percentage of your available credit that you are using, you can boost your credit score substantially.

Why? Credit utilization accounts for 30 percent of your FICO score. Keep in mind, the lower your total credit utilization, the higher your possible FICO score. But before you embark on requesting a higher spending limit, make sure you’re doing it for the right, responsible reason. Ready to boost your credit rating? These six suggestions will help you get your credit card limit increased.

1. Don’t ask too soon or for too much

“Most credit card companies will automatically review your credit after about six months or so of card membership,” Ken Lin, CEO of CreditKarma.com, tells Time. “However, if this doesn’t occur, you can call up your issuer to request an increase.” Don’t request a limit increase within six months of getting a new card, however. It could be an instant red flag that could lead to denial.

Try to be conservative when you’re requesting an increase, Time suggests. Your issuer will typically base its decision on your credit and what kind of a line increase you ask for. You shouldn’t ask or expect for an issuer to double your credit line. Stick with between 10 to 25 percent. If you do ask for too much and get declined, you’ll most likely have to wait at least two to three months before asking again.

This is the easiest way to increase your limit, mainly because it doesn’t require you to do anything. Credit card issuers periodically review customer accounts to determine whether customers should get a credit limit increase. If you’re deemed eligible, you’ll automatically get your credit limit hiked, according to U.S. News & World Report.

The best way to get an automatic increase is to ensure your account has relatively low limits. The higher your limit, the less likely it is that your issuer will hike it for you.

A great way to convince your issuer you deserve more money is by using your card regularly and paying it back. CompareCards.com writes that this can sometimes require you to put a lot on your card and pay it back for several months in a row before you’re able to qualify. Spending money like this shows your issuer you need access to more funds and can handle it responsibly.

The easiest way to do this is to stop paying for things in cash and put them on your card instead. Use the cash to pay your card balance off within that billing cycle. If you continue with this system, you’ll build your credit score while increasing your chances for more credit, per CompareCards.com.

4. Limit your request to your best credit card

Make sure you aren’t requesting limit increases with all of your cards. When you request a limit increase, your issuer pulls your credit report, and that inquiry can cause a temporary dip in your credit score. Additionally, Wise Piggy writes that if credit card companies see multiple hits on your report from other card issuers, it could be a red flag for them. It comes off as you being desperate for money, causing your issuer to get nervous. A nervous issuer is likely not going to up your limit.

Instead, focus on your best credit card, and make one strong case to one company, rather than a half-attempt to a bunch of companies. If they say no, make sure you wait a couple of months before trying again with a different issuer.

Now is the time to remind your issuer how long you’ve been a loyal customer, suggests Time. Make sure you let them known you have a strong payment history, and if your household income has recently increased, be sure to mention it. You should also work in a sensible reason for wanting more credit, such as you frequently travel, you want to start paying more bills with the card, or you’re hoping to earn rewards for things you’re already buying.

It’s important that you’re regularly making payments on time before requesting an increase. Late payments are viewed by issuer’s as a sign of poor money management, which is a huge red flag for most, according to CompareCards.com. In addition to making on-time payments, make higher payments than the minimum monthly; you’re proving you can handle a larger limit.

If the issuer’s immediate response is negative, Wise Piggy recommends reminding the company you have plenty of other credit card offers to choose from. Let them know you’d like to keep your business with their company, and check whether there is a supervisor who can review your request.

This method is a little bit outside of the box, and you should proceed with caution. U.S. News & World Report writes that this strategy is a bit more tedious and could negatively impact your credit score. Many credit card issuers allow card holders to transfer a portion of a credit card’s spending limit to another credit card account, as long as both cards are from the same issuer.

For example, if you have two different Chase cards, each with a $2,000 spending limit, you can them move $1,000 from one card’s limit to the other. There are some people who open another credit card from the same issuer solely for this purpose. Just keep in mind that should you decide to close the new card soon after transferring the spending limit, it will most likely hurt your credit score.


When Should I Ask for a Credit Limit Increase?

Usaa increase credit card limit

The right time to ask for a credit limit increase

When you’ve recently gotten a raise. An increase in income means you’ll be able to cover an increase in credit card expenses. Note: You may need to provide proof of your new income to get approved for a higher credit limit.

When your credit is good. A good credit score implies to your credit card issuer that you’re responsible with money. Therefore, you’re more likely to make payments on time and understand how much you can afford to charge each month. Remember, good credit isn’t the same thing as good financial health, but creditors make the assumption that these qualities are one in the same. Aim to have both.

You’ll have a better chance if the account has been open at least six months to a year.

When you have a good track record. If you’ve made all of your payments on time and never maxed out your card, you’re more likely to get approved for a limit increase. You’ll also have a better chance if you’ve had your account with this particular creditor for at least six months to a year.

The wrong time to ask for a credit limit increase

When you’ve recently requested increases elsewhere or applied for new lines of credit. When you apply for new credit, and sometimes when you apply for a credit limit increase, a hard inquiry appears on your credit report. New credit applications trigger a new credit penalty, which may hurt your credit, especially if the length of your credit history is short.

When you’ve taken on a lower paying job. If you’ve recently quit your job and taken on a lower paying, perhaps more fulfilling career, this isn’t the time to ask for an increase. Your spending power has decreased, so the issuer has no reason to extend more credit to you.

If you’re making less money, your spending power has decreased, so the issuer has no reason to extend more credit to you.

When your credit is iffy. If your credit score isn’t good or excellent, it’s likely that you won’t get approved for more credit because you haven’t shown good judgment with credit in the recent past. Build up your score before making a limit increase request.

When you’re embarking on an overseas adventure. Travel feeds the soul, but it also makes you more susceptible to credit card fraud. Travel also frees our (financial) inhibitions, leading us to spend more than we normally would. By upping your limit, you’ll give yourself more leeway to run up an expensive credit card bill you’ll have to pay when you get back to reality. Wait to increase your limit until you get back.

The worst they can say is no. Shouldn’t I try?

Oftentimes, a limit increase request will trigger a hard pull on your credit report. This can hurt your credit, especially if you have a short credit history. If you call your credit card issuer, you can ask if a hard inquiry will be initiated. Sometimes you can take a smaller increase and forgo the pull.

Asking for an increase could affect your credit score.

If you decide it’s the right time to up your limit, either call customer service or request a credit limit increase online. It’s a very simple procedure.

Bottom line: As with anything else, there’s a right and a wrong way to do things. Follow our guidelines above to time your credit limit increase request so it’s more likely to get approved. And, of course, try to keep your spending low enough that you can pay your credit card in full each month.

See if your credit is in good shape

Understand how issuers set credit limits

Learn the benefits and drawbacks of a higher credit line

I apply for this many new cards:

Usaa increase credit card limit

NerdWallet's Best Cash Back Credit Cards

Cash Back vs. Travel: Which Is Best for You?

Disclaimer: NerdWallet strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions. Pre-qualified offers are not binding. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion® directly.

Advertiser Disclosure: So how do we make money? We receive compensation from our partners when someone applies or gets approved for a financial product through our site. But, the results of our tools (like our credit card comparison tool) and editorial reviews are based on quantitative and qualitative assessments of product features — nothing else. Compensation may influence the products we review and write about, the order in which categories appear in “best of” articles, whether products appear on our site and where they’re placed. While we try to feature as many product offers on our site as we can maintain (1,200+ credit cards and financial products!), we recognize that our site does not feature every company or financial product available on the market.