Many people are presented with unexpected expenses such as: illnesses, accidents or home repairs. It may be that we just want to travel or because the time of year demands that you increase your consumption capacity. In these cases, request an increase in your credit card limit it is a good alternative. Plus it can improve your creditworthiness.
Creditworthiness
This term refers to the feasibility of the person or a company to acquire a loan. In other words, it is one’s ability to respond or repay funding. Banking institutions take this factor into account when analyzing your credit limit. We teach you how to calculate your debt capacity.
The formula is as follows: debt capacity = (monthly income – fixed expenses) x 0.40. Write down the monthly income and fixed expenses per month, this includes rent, food, transportation, etc. Including variable expenses like entertainment, vacations, etc. By subtracting both groups, the figure you return is the amount you can pay to debt.
Improve credit rating
- Pay on time credit card and other bills
- Request your credit report every so often and review it
- Preferably do not apply for many credit cards at the same time or credit accounts
- Try to keep credit balances low
- Pay debts online that were transferred to collection.
How to request an increase in your credit card limit
In general, financial institutions consider 2 alternative means for customers, when requesting or requesting an increase in their credit card limit and that you can consider:
- You can request it online. Access the administration of your online account associated with the credit card.
- Locate the section that will help you request the increase in the credit limit. Not all financial entities related to credit cards have this service online. If available, you will see a sign indicating “Increase line of credit”, “Increase your credit limit” or “Request your credit increase.”
- Then, enter the information requested on the page. You should consider that it is likely that they will ask you to indicate the amount you are requesting, including the annual income so that the approval of increasing your credit limit becomes feasible.
- Request by phone. The back of the credit card shows the phone number, so the customer can contact customer service.
- Call the number and follow the instructions on the menu, until you can contact a financial executive about your account. There are menus that directly specify the number to press, for the request to increase the credit limit.
- Tell the representative about your intention to get a high credit limit. Detail your planning, indicating the time of the existing limit and the way you have managed the debt well.
- Correctly answer the questions that the executive asks you. Do not forget to mention the reason for requesting the limit increase and facilitate your current annual income.
- Request that the financial institution send you the confirmation or written approval of the credit line.
Tips to increase your credit limit
- Pay your bills on time for 6 months
- Reduce the use of credit. Try not to limit consumption to the maximum of the TDC limit.
- Choose the credit card that you plan to increase the limit
- Do not exaggerate the amount to request.
It is worth mentioning that, applying for a credit card it does not mean having free money. Remember that the amount they give you will have to be replaced plus interest. So it is important to look for alternatives to control expenses. Before extending your line of credit it is good consider these questions: What do I need it for? How much will it cost me to pay it including interest? What are the benefits of using TDC, instead of paying cash? We hope you can take advantage of this information. If you wish, you can leave us your opinion.
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