It helps to be older and richer
Both income and age appear to be factors when it comes to:
- Asking a card issuer for a higher limit.
- Winning that increase.
Consumers with the highest incomes were the most likely to have asked for a higher credit limit, while millennials were the least likely to say they inquired about an increase.
The survey also found that:
- Cardholders 30 and older were much more likely to be granted a higher limit (81%) than the youngest survey respondents age 18 to 29 (46%).
- 84% of cardholders with an annual household income of at least $30,000 were approved for the higher limit versus 60% with an income below $30,000.
"What goes into that credit decision is we look at the account behavior, payment history, overall utilization levels, the traditional things about how long you've had this account and how you've handled this account," says Brian King, chief risk officer for card services at JPMorgan Chase. Card companies also will look at ability to pay -- whether you're likely to repay a loan based on your income, assets and current obligations.
What makes a credit score
In general, you should keep your spending to less than 30% of your credit limit to avoid negatively influencing your credit score. You have to mind the other factors that go into your score, such as:
- Payment history.
- How long you've had a credit history.
- How much new credit you've applied for.
- The type of credit used.
"All of those things coupled together -- and depending on the behaviors you display -- can impact (your credit score), not just any one on its own," says Diane Moogalian, vice president of operations at Equifax Personal Solutions, the credit bureau's credit monitoring and identity protection business unit.
An increased limit can also hurt your credit, especially if you start using that extra credit and carry larger balances. But you could also suffer a temporary credit ding just by asking for an increased credit line if the card issuer checks your credit report.
Ulzheimer recommends asking your credit issuer to approve the highest credit line increase that won't trigger a credit pull.
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How to ask
When you call your credit card company to ask for a credit line increase, you should be prepared to defend your request. You may tell the company you're having a hard time utilizing the card because you're constantly hitting the credit limit, or that other card company offers look attractive to you, Ulzheimer says.
"The primary thing is we are always looking to design our products and our cards to meet both the spending needs and the borrowing needs of our customers," King says. One way to meet a customer's needs: "Keep the utilization of those credit lines at a reasonable rate."
You shouldn't ask for a credit increase if you're doing it out of desperation. If you are, the card company will realize you don't have the ability to repay.
But "if you're a good customer, it is almost a guarantee that you're going to get some credit line increase," Ulzheimer says. "You're in a position that they don't want to lose you."