If you are new to the credit game, the initial limits on your credit cards can be low. A credit limit means the maximum amount of money you can charge to your credit card. This includes fees, balance transfers from other cards, and cash advances, as well as the purchases you make.

People rebuilding credit often turn to the excellent solution of getting a secured card. However, the limits are often only $300-$500. This can be quite limiting. In addition, it’s easy to charge up the entire credit line, which could be bad for your credit score (for the best credit scores, you need to keep your credit limits under 25% of maximum). It’s natural to want to increase your credit limit to allow you to just use one credit card for all of your household expenses (you are of course going to pay off your entire balance each month, right?) . If you are going on vacation, for instance, juggling several credit cards with low credit limit is just a hassle and you may want to raise this limit. Here are some ways you can accomplish this goal.

1. You need to work on improving your perceived worthiness to borrow money from your bank. This “credit score” is what shows lenders that you are not a risk for them, and tells banks that you are trustworthy and able to handle credit responsibly.
2. The easiest way to build your credit worthiness, and thus raise the amount of your line of credit, is to put everything you buy on your credit card (make sure you either pay off the balance each month or keep the balance below 25%). Don’t save your card for emergencies. Your credit card company wants to see that you have the ability to spend wisely and to pay back the amount you credit to your card. If you rarely use the card, the company will wonder why you would need a higher credit limit. Also, if they see you using your card, the potential for making money off of your account is higher due to potential interest and fees.
3. The second best way to improve your credit limit is to pay as much as possible on your outstanding balance every month. If you can, make every attempt to pay the entire amount; in any case, always pay more than the minimum required.
4. Some credit cards may require proof of income before they will grant you a higher credit limit. With others, you may find their website has an online feature with which you can request a raise in credit limit. If you use this feature judiciously, not more often than every four or five months, you may be able to increase your line of credit. Other companies will automatically extend your credit limit if they see you are spending up to your current limit – and paying it back regularly. That last phrase is most important!

If your credit card company does raise the limit on your credit, it means that you have shown them they can trust you as a borrower of their money. You should realize, however, that a higher credit level may incur more fees, as well as increased interest charges. Be very careful as you begin to operate within a higher limit, to make sure interest rates don’t spiral out of your comfort zone.

What has been the most effective method for you in increasing your credit limit? Tell us about it!

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