How To Increase Your Credit Limit

by Redeeming Riches on April 30, 2013

If you are signing up for a credit card, you’ll be agreeing to certain terms and conditions. As well as a particular interest rate, decided by your credit rating and the credit card deal, you will be given a credit limit. This is the maximum amount you can spend on your credit card without incurring extra fees and penalties.

The problem is that when you first apply for a UK credit card, you don’t necessarily know what your exact credit limit will be. The credit card may be advertised with a particular credit limit, but the actual amount you will get depends on your credit rating and whether you are a new customer or not. You may only find out your credit limit once your application has been approved and your account is activated.

What to do when your credit limit isn’t enough

If for some reason you aren’t happy with your current credit limit, you can contact the card provider and ask for it to be extended. You should however wait a few months before doing this, in order to prove to the lender that you are a responsible and sensible customer. If you have gone over your credit limit in the past or have missed any repayments on your credit card bill, it isn’t likely that the lender is likely to agree to a higher credit limit.

Another way to get a higher credit limit is to improve your credit score. You can do this by paying off your balance in full and on time each month and over time, this will help you to build up a stronger credit profile. You can use your stronger position to approach your existing card provider for a higher limit, or you can take a look at a credit cards comparison website and find yourself a better deal.

Is it a good idea to extend your credit limit?

Before you extend your credit limit, you should think about whether it’s actually a good idea for you. The fact that you need more funds at your disposal could be a warning sign that you are spending beyond your means. You should be asking yourself whether you can actually afford to borrow more money and pay off your balance in full each month. To avoid ending up in debt, it may also be a good idea to work out a realistic and affordable repayment plan for your borrowing.

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