Get a credit limit increase with a Credit One Bank card
When your Credit One Bank credit card arrived, it had a credit limit based on your assessed creditworthiness of …
When your Credit One Bank credit card arrived, it had a credit limit based on your assessed creditworthiness from the time you applied. If you’ve since used your credit card responsibly or increased your income, you may be eligible for an increase in your credit limit.
“Getting a credit limit increase won’t hurt your credit score,” says Chuck Czajka, founder of Macro Money Concepts in Stuart, Florida.
In fact, an increase might even improve your score, as long as you don’t use the higher limit to spend beyond your means. Credit One is for clients with bad and less than perfect credit, so for those with credit problems, a credit rating increase is a welcome result of this demand.
Here’s what you need to know if you want to increase the credit limit on your Credit One Bank card.
Who is eligible for a credit limit increase with Credit One?
Issuers regularly assess borrowers for potential credit increases. In fact, if you’ve been a responsible credit card user or increased your income, Credit One can increase your credit limit for you. If Credit One has not done so, you may need to contact the issuer to request a raise.
“You don’t need a reason to increase your credit limit, although there are plenty of reasons you might ask,” Czajka explains. For example, “getting a raise can help you repair your credit or make big purchases more efficiently.” It can also help you consolidate your debt by allowing you to transfer a balance from a card with a higher interest rate to one with an increased limit.
[Read: Best Secured Credit Cards.]
“You should have had the card for at least six months and have a good history of paying off your debt on time for the credit card in question and any other cards and loans you may have,” says Lisa Fischer, Director of Growth and loans. at Mission Lane, which offers credit cards to those with below-average credit scores.
Responsible use also applies to credit cards you have from other issuers. Credit One Bank assesses your credit and payment history with it as well as with other creditors.
“You may also want to apply when you receive a raise or additional income, so that the credit card companies have more evidence that you can handle the increased expenses,” says Fischer. “On the flip side, you might want to wait to request a raise if your credit isn’t where you want it to be, if you’ve recently opened another line of credit, or if you’ve suffered a pay cut. ”
Credit card issuers also consider the length and stability of your employment history when determining credit limit increases.
“It’s important to only ask for a credit limit increase if you’re sure you’re not overspending and will be using your credit responsibly,” Czajka explains. “Receiving a credit limit increase means you can spend more on your credit card at the same time, which can be good for responsible users and potentially dangerous for those who don’t pay their bill in full each month. ”
What to do before asking for a raise?
“Before asking for a raise, make sure your credit is in tip top shape,” says Fischer. The best way to show you’re ready for a credit limit increase is to use your current cards responsibly. “Make all of your payments on time and try to contribute more than the minimum payment if possible given your financial situation,” she says.
This applies to all of your credit accounts, not just the card you want a raise on. Responsible use of your cards can help you maintain a low rate of credit usage, or the percentage of your available credit that you are using at any given time, which improves your chances of being approved.
Issuers also look at your income, Czajka says. They will likely assess your debt-to-income ratio. If your debt is too high or you’re struggling to pay off your obligations, getting approved for a credit increase is much more difficult, Czajka explains.
[Read: Best Credit Cards for Fair Credit.]
If you’ve nearly used up all of your current cards, the bank may consider you a high-risk borrower and be less willing to give you a larger line of credit.
“Plus, avoid doing anything that could potentially lower your score, like opening a new credit card or taking out a loan, or making a large purchase like a car or furniture that reduces your available funds,” says Fischer. She also recommends taking a close look at your credit report to make sure everything is correct. “Sometimes there can be errors (on the report) that can take a long time to correct,” she says.
Skeff Bisset, managing partner at Bisset Financial Group, says don’t stress too much about your actual credit score. “Frequently, the rating agencies show you a number that may be higher than what is seen by credit card and loan providers,” he says. “If you have a solid score with a good stamp, you might feel comfortable applying.”
Ultimately, getting a credit line increase is about personal responsibility and consistency, Bisset adds. “Showing good behavior and managing what you spend (and) do with your credit is key. ”
How to request a credit limit increase with Credit One Bank
Credit One Bank automatically examines your account for eligibility for the increased credit limit and notifies you as soon as you qualify for a higher line of credit, but you can also request an increase by calling customer service at 877 -825-3242.
Credit One cardholders who have bounced back from potentially credit-damaging events, such as bankruptcy, divorce, or unemployment, should take note of any changes in their finances. When you request a credit limit increase, have these updates of your personal financial information handy, including annual income, employment status, and monthly rent or mortgage payments. The bank determines your debt ratio and assesses your financial stability using this information.
Bisset tells consumers who apply for a credit limit increase or a new credit card to also ask their provider for a lower interest rate. “Believe it or not, they can negotiate with you on this.”
What to do if your request is refused
“There are many reasons why banks deny people increases in credit,” Czajka says. High balances, late payments in the past 12 months, too many credit cards, or even applying to too many credit card companies can all be reasons to deny an application. increase in credit limit.
“I have seen credit card issuers send letters if you were refused because of information on your credit file,” he says. “Some companies will even give you the option to correct this information and reapply. ”
[Read: Best Balance Transfer Credit Cards.]
You can also contact the bank directly for more information on the reasons why you were refused. Credit One cardholders who are denied a raise may need to show improvement by paying on time or staying on top of their balance before taking on more responsibility.
“Consumers should always want to know as much as possible about their financial situation so that they can make improvements where they can,” says Fischer. “This will help improve their chances of getting approved for increases in the future, as well as for other credit needs, like a mortgage or an installment loan. ”
Some common reasons include having a new account. The bank needs to see the payments on time for several months before you become eligible for a raise. Setting up automatic payment can help you never miss a payment.
How Can Increasing Your Credit Limit Affect Your Finances?
Increases in your line of credit can have a positive impact on your finances if you use the increase responsibly. “If your financial situation has improved, an increase in your credit limit means more purchasing power and less use of credit, which can lead to a better credit rating,” says Abhi Chaudhary, Managing Director consumer products at Green Dot Corp., a banking services company. However, “if you need a lifeline, looking for credit limit increases or taking on more and more debt might just be contributing to a hole you can’t get out of.” Before asking for a line of credit increase, weigh the pros and cons.
– Increase flexibility. A higher credit limit allows you to buy more on credit, which can help you reap the rewards of credit cards.
– Pay off debt at higher interest rates. You may be able to transfer higher interest credit card balances to your card after increasing the credit limit, which will help you consolidate your debt and lower its overall cost.
– Improve your credit score. Increasing your credit limit can improve your credit score by lowering your credit utilization rate, as long as you don’t exceed your new limit.
– Increased expenses. Being able to spend more doesn’t necessarily mean you should be spending more. If your income cannot cover your expenses, an increase can be a bad idea.
– No more interest charges. If you spend more and can’t pay your bill on time each month, you could end up paying even more interest charges over time.
More American News
How to negotiate with your credit card company
Automatic credit card payments: what you need to know
How to rebuild your credit after a missed credit card payment
Get a credit limit increase with a Credit One Bank card originally appeared on usnews.com