If you want to get a higher credit card limit, start by making your case directly to Capital One.
Capital One is one of the most popular credit card companies in the United States.
Millions of people have Capital One credit cards, and thousands more apply each year. Have you ever found yourself in a situation where your credit limit wasn’t enough? If so, don’t worry––this guide will explain how to successfully increase your credit limit on your Capital One credit card.
Understanding your credit limit
The first step is to understand what your credit limit means.
Your current credit line is the maximum amount of money you can spend on your card, excluding any purchases made with your cash advance or balance transfers.
The “credit utilization” ratio refers to the total amount of money owed on all of your Capital One credit cards. A lower credit limit, such as $500, can be problematic because it can push your debt-to-credit percentage above 30%. As a result, your credit score could suffer.
When you understand how your credit limit benefits you, you will be able to understand:
- The importance of maintaining a good credit score
- How to maintain a good credit score
- The importance of keeping track of your balance and paying it off in full each month
- Methods for improving your credit score, such as paying off any outstanding debts.
- Tips for increasing the size of your savings account, which will help you avoid having to take out loans in the future.
- Understanding types of accounts that can be opened with various institutions or banks.
- Finding ways to save money on daily expenses such as groceries and utilities.
Before you request a credit increase
Use your card responsibly
Before requesting an increase in your credit limit, make sure you’re using your Capital One credit card responsibly. Making on-time monthly payments and never carrying a balance is always preferable!
This means you’d need to make at least 12 months of on-time payments on your current cards before they’d consider raising your credit limit. If it’s been at least a year since you requested a credit raise, there’s no need to be concerned.
Also, don’t apply for too many other credit cards. Applying for too many other credit cards will almost certainly jeopardize your chances of receiving a higher credit limit. This is because lenders will interpret this as you taking on more debt, and they will be less likely to approve your request.
Simple steps you can take to ensure you’re using your card responsibly include:
- Paying off your credit card in full every month
- Maintaining a record of your spending habits and adhering to a budget
- Using cash for small purchases, so you’re not tempted to buy more than you need
- Avoiding signing up for store credit cards unless there are benefits that will save you money
- Checking your credit score before applying for any loans or other financial products
- Reviewing the terms and conditions of all contracts before signing them
Keep track of your spending habits
If you want to increase your credit limit, you should keep track of how much money is going out (how much you are spending).
You should make sure that the amount of money you’re spending on minimum payments does not exceed 30% of your monthly income. If this occurs, Capital One will likely reject your request to increase your credit limit.
In other words, make sure that you are spending no more than 30% of your monthly income on minimum payments. This means, for example, if your salary is $4000 per month, make sure not to spend more than $1200 each month.
Plan to pay off the balances on time and in full every month
One of the most important things to do before making any kind of request for a credit increase is to have a solid game plan in place for paying down those existing credit balances within 30 days or less.
If Capital One determines that you are unable to pay off your balances on time, the request will likely be denied.
Capital One advises paying off more than the minimum monthly payment. For example, if your balance is $1500 and your monthly credit card payment is only $50, you should pay more than this amount regularly to prevent accruing more debt that could risk any future requests for an increase in your credit limit.
Request a credit increase for a valid reason
If you want to increase your credit limit, make sure it’s for a genuine need and not just for the sake of having more money. If Capital One suspects this is the case, your request may be denied.
Valid reasons for requesting a credit limit increase include the following:
- You’ve been a customer for a long time.
- There is no outstanding balance on the account.
- You have an excellent credit history with the organization.
- Your income has significantly increased in recent months, or you need to purchase something expensive shortly (examples include buying your first home, paying for medical expenses)
- You want to consolidate other debt onto this card since the terms are better than the terms on your other cards.
Consider all of your financial obligations
One of the most important things to consider before increasing your credit limit is how much debt you have currently.
Capital One recommends that if a consumer is going to request an increase in their credit line, they should first ensure that all other bills are being paid on time and within 30 days or less. This means checking car loans, mortgage payments, and any other bills you have.
Credit bureaus affect your approval rate
Knowing that there is a mathematical algorithm used by all three major credit bureaus to determine your credit score (Equifax, Experian & TransUnion) makes it clear why you need to make sure that you’re keeping up with responsible spending.
To determine your risk factor for payment default, this algorithm considers factors such as how much you owe, how frequently bills are paid on time, and what types of new credit have been opened recently. For example, if all three bureaus show that you’ve had a late or missed payment on your credit cards, getting a higher limit will be much more difficult.
This is significant because it emphasizes the importance of paying off your credit card balances on time and in full each month. Repayment history accounts for 35% of the FICO score calculation. This is yet another reason why you must make all of your monthly payments on time, whether for car loans or student loans.
Keep the balance below 50% of your credit limit
Carrying balances that are less than 50% of your available credit is ideal if you want to get the most bang for your buck when it comes to increasing your credit limit.
If Capital One determines that this is not the case and that all they see are high balances due in 30 days or less, they will find it much more difficult to approve a credit increase.
Make sure your credit score is high enough
If your credit score is less than 700, the chances of Capital One approving an increase are slim. Before they consider giving you access to even more money than you already have, you’ll need to have a solid track record with them.
Having a credit score that is higher than the average tells Capital One:
- You have a track record of paying your bills on time.
- You are financially responsible and can be relied upon to borrow money responsibly.
- You understand how to save money and make sound financial decisions.
- You’re more likely to pay off your debts on time.
How long does it take to process requests?
Capital One typically responds with an answer immediately after submitting the request. However, for other people, the process can be much faster. It all depends on how diligent you’ve been with your repayment and whether you’re requesting an increase due to a genuine need.
Contact Capital One
If you’ve been a good customer and have kept up with your payments in full and on time, then there’s nothing wrong with asking for a credit increase. It never hurts to ask!
This is how many people can successfully get their credit limit increased. If you need more credit but don’t want to take out a loan or pay for things up front, then this can be a great way of doing it.
Building great credit is easy (and eco-friendly) with Aspiration
Building and maintaining good credit is crucial for your financial health. The truth is, it’s not that hard to do!
With the Aspiration Zero carbon-neutral credit card, you can build great credit just by going carbon neutral. All you have to do is be mindful of your spending habits and use your card responsibly.
We want our members to feel confident in their ability to manage their finances so we provide a plethora of articles on topics like budgeting and money management which will help get you started with building better habits around managing money.