Need to make a big purchase? Use these tips to raise your credit limit or determine if you should apply for a new card.
You’ve scrimped and saved for a big-ticket item—say, a trip to Tahiti or a new dining-room set—and you’re ready to pull the trigger. But you’re concerned that your splurge might max out your plastic. If you have a credit score of 720 or higher (check yours at myfico.com for $20), fret not, says Beverly Harzog, an independent credit-card expert. Simply ask for a bump in your credit limit.
All it takes is one phone call to your credit-card issuer. Make your case by saying, “My limit isn’t where I need it to be, which prevents me from using the card in some situations. What can you do for me?” The customer-service rep has limited flexibility but may be able to raise your limit by as much as $1,000, says John Ulzheimer, the president of consumer education at the credit-monitoring site SmartCredit.com.
However, if you’re looking for an increase of $5,000 or more, the process is more complex. You may need to speak to a supervisor, and your issuer may conduct a full evaluation of your creditworthiness, which takes a few weeks to complete. Even if you are ultimately successful, the process could lower your score slightly.
If that troubles you or if you’re simply in a hurry, it could be easier to apply for a new card. (Compare your options at creditcards.com.) As long as your score is good, your new card request will probably be approved.