Is it worth applying for Credit Limit Increase?

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ascension
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Is it worth applying for Credit Limit Increase?

Post by ascension » Tue Oct 17, 2017 5:54 pm

Hi Guys,

I just checked credit score and it's at 776 at the moment.

My credit limit for my credit card which I got 5 years ago is $13000

Now I graduated, I made $300k last year (worked half year)

And this year, I should be making around $550k.

I don't want them to inquire credit score and deny it. What would be a safe number to increase my credit card limit to?

Btw, I use Chase Sapphire Preferred

lakpr
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Re: Is it worth applying for Credit Limit Increase?

Post by lakpr » Tue Oct 17, 2017 6:41 pm

I make barely 150K and my credit limit on Chase Sapphire Reserve is 30K. But then I have 28 year history with over 800 credit score. No intention of bragging, just providing you a datapoint. Of course, I ran more than 40K expenses through that card in the past year. Used it for EVERYTHING.

Edited to add: seems to me that 20% annual income is what they would approve you for, based on anecdotal data points from my friends.

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Pajamas
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Re: Is it worth applying for Credit Limit Increase?

Post by Pajamas » Tue Oct 17, 2017 6:45 pm

Do you NEED a credit limit increase? In the past, Chase has simply raised my limit and then notified me.

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whodidntante
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Re: Is it worth applying for Credit Limit Increase?

Post by whodidntante » Tue Oct 17, 2017 6:45 pm

There is no way to know unless you try. If this is your only credit I would ask for 20k. If you have a more extensive history that includes car loans and other positive credit history, I would ask for 25k. You might want to apply for a couple more cards if you would need more revolving credit. It's good to keep your utilization below 30% if you plan to apply for new credit soon.

My highest limit card is 25,900 which was given automatically when the account was opened (no CL increase). I have two other cards with a $25k limit. It's actually a limiting factor at some point. Banks get concerned that you'll max all your cards and move to Thailand I guess.

I've heard of 50k limits and I have a charge card that allows 100k.

Dottie57
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Re: Is it worth applying for Credit Limit Increase?

Post by Dottie57 » Tue Oct 17, 2017 6:56 pm

What do all of you charge that you need such large limits.

ascension
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Re: Is it worth applying for Credit Limit Increase?

Post by ascension » Tue Oct 17, 2017 7:01 pm

Dottie57 wrote:
Tue Oct 17, 2017 6:56 pm
What do all of you charge that you need such large limits.
Really no need for credit increase. I just heard that having higher credit limit helps with credit score.

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Pajamas
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Re: Is it worth applying for Credit Limit Increase?

Post by Pajamas » Tue Oct 17, 2017 7:29 pm

ascension wrote:
Tue Oct 17, 2017 7:01 pm
Really no need for credit increase. I just heard that having higher credit limit helps with credit score.
Why do you need a credit score higher than 776? Is there some benefit to it?

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whodidntante
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Re: Is it worth applying for Credit Limit Increase?

Post by whodidntante » Tue Oct 17, 2017 7:31 pm

Dottie57 wrote:
Tue Oct 17, 2017 6:56 pm
What do all of you charge that you need such large limits.
I'm a churner so I charge everything possible, so long as the fee does not exceed the rewards. I've had some high spending years due to attending graduate school and frequent international travel and decided I might as well exploit that.

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whodidntante
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Re: Is it worth applying for Credit Limit Increase?

Post by whodidntante » Tue Oct 17, 2017 7:34 pm

Pajamas wrote:
Tue Oct 17, 2017 7:29 pm
ascension wrote:
Tue Oct 17, 2017 7:01 pm
Really no need for credit increase. I just heard that having higher credit limit helps with credit score.
Why do you need a credit score higher than 776? Is there some benefit to it?
There could be. 776 is quite close to 740, which is the cutoff for the best mortgage rates. So if you churn or just float a large amount temporarily, you could get pushed under. Also, there is a new trend of banks giving huge unsecured loans at low rates for cars or other purchases. Since the lender goes out on a limb for that, it requires fantastic credit. I've heard rumors that you need a score > 800 for a large unsecured loan. Lightstream is one such lender.

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Pajamas
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Re: Is it worth applying for Credit Limit Increase?

Post by Pajamas » Tue Oct 17, 2017 7:37 pm

whodidntante wrote:
Tue Oct 17, 2017 7:34 pm
Pajamas wrote:
Tue Oct 17, 2017 7:29 pm
ascension wrote:
Tue Oct 17, 2017 7:01 pm
Really no need for credit increase. I just heard that having higher credit limit helps with credit score.
Why do you need a credit score higher than 776? Is there some benefit to it?
There could be. 776 is quite close to 740, which is the cutoff for the best mortgage rates. So if you churn or just float a large amount temporarily, you could get pushed under. Also, there is a new trend of banks giving huge unsecured loans at low rates for cars or other purchases. Since the lender goes out on a limb for that, it requires fantastic credit. I've heard rumors that you need a score > 800 for a large unsecured loan. Lightstream is one such lender.
Do you need a huge unsecured loan? Wouldn't you be careful not to churn or float a large amount before applying for a mortgage?

Mike Scott
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Re: Is it worth applying for Credit Limit Increase?

Post by Mike Scott » Tue Oct 17, 2017 7:41 pm

Usually all you have to do is ask. Or get another card or two with similar limits.

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tetractys
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Re: Is it worth applying for Credit Limit Increase?

Post by tetractys » Tue Oct 17, 2017 7:58 pm

Pick a number and ask. I've done that a few times for no pressing reason, and never been denied; although I've never asked for much. Maybe you could high ball it and see what happens. -- Tet

MikeG62
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Re: Is it worth applying for Credit Limit Increase?

Post by MikeG62 » Wed Oct 18, 2017 7:51 am

ascension wrote:
Tue Oct 17, 2017 5:54 pm
Hi Guys,

I just checked credit score and it's at 776 at the moment.

My credit limit for my credit card which I got 5 years ago is $13000

Now I graduated, I made $300k last year (worked half year)

And this year, I should be making around $550k.

I don't want them to inquire credit score and deny it. What would be a safe number to increase my credit card limit to?

Btw, I use Chase Sapphire Preferred
A $13,000 credit limit for someone earning $550,000 per year is incredible low (IMHO). I would absolutely apply for an increase . Often you can do this online without even needing to call in. Or maybe you want to call in and ask for a specific limit (like $30,000).

Whether it will "ding" your score I cannot say. I suppose if it requires a hard pull on your credit report, then it may. However, that is likely to be temporary.

FWIW, my aggregate credit limit spread across many cards is >$300,000. I pay all CC's in full each month. Never exceed 10% utilization. To be honest, I could do to have the available credit on some cards reduced (by 50% or more). However, I can't help but think any action to do this will only result in a drop in my credit score. So I leave things as they are. Available credit keep increasing as I add CC's over time - it's not that I need or want such a high credit limit.

omgbirdman
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Re: Is it worth applying for Credit Limit Increase?

Post by omgbirdman » Wed Oct 18, 2017 8:12 am

I have 10 credit cards. I request a credit limit increase every 6 months on all my cards which do not require a hard pull to do so (Discover, Amex, Capital One, Citi). Chase will do a hard inquiry if you request a credit limit increase. For this reason, I wouldn't recommend it.

takeshi
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Re: Is it worth applying for Credit Limit Increase?

Post by takeshi » Wed Oct 18, 2017 8:37 am

ascension wrote:
Tue Oct 17, 2017 5:54 pm
Is it worth applying for Credit Limit Increase?
Worth is always highly subjective regardless of topic. You need to clarify to us what defines how you determine worth on the matter. What are you looking to accomplish? What are you not able to do with the lower limit? What potential concerns do you have?
ascension wrote:
Tue Oct 17, 2017 5:54 pm
I just checked credit score and it's at 776 at the moment.
Which scoring model? Which CRA? You don't have just one score. There are many scoring models used by creditors in their credit decisions and for most models you have a score with each of3 major CRA's. Make sure you're keeping tabs on all 3 and not just 1.

If this is a FICO 8 then you're already in the top bracket and a credit limit increase won't really make much of a difference even if it reduces your revolving utilization -- i.e. balance(s)/limit(s).
ascension wrote:
Tue Oct 17, 2017 5:54 pm
I don't want them to inquire credit score and deny it.
No one wants to be denied but why are you worried about it? Again, if your score is a FICO 8 then a single inquiry won't have much impact.

Additionally, we can't guarantee whether or not you will get an increase. A creditor will consider your score in making the decision but it's not just a matter of score or just a matter of score and your income. They will consider whatever data is in the report they pull and compare it to the underwriting criteria of the specific product to determine if you qualify for an increase. We don't have access to your report or the criteria so we can't make any sort of assessment. Your score and income both look good but there aren't necessarily going to guarantee an increase.

I say "no guarantee" just to set reasonable expectations but in a nutshell with the little info you've provided I would guess that you chances of getting an increase would be good.
ascension wrote:
Tue Oct 17, 2017 5:54 pm
What would be a safe number to increase my credit card limit to?
We can't tell you that for reasons I already stated above. I don't understand your usage of the word safe. Any higher limit is safe. If you mean, what you won't get denied for, that's something that we cannot tell you. All you can do is make the request and see what response you get. Many creditors will counteroffer if you don't qualify for the requested amount and qualify for less. The amount requested plays no part in determining whether or not you qualify. That all depends on your credit. Some creditors don't even allow you to specify an amount to request and will just grant you what they determine.
lakpr wrote:
Tue Oct 17, 2017 6:41 pm
Edited to add: seems to me that 20% annual income is what they would approve you for, based on anecdotal data points from my friends.
Chase's max exposure for me was about 70% last time I bumped into it. One's credit definitely plays a role in this.
Pajamas wrote:
Tue Oct 17, 2017 6:45 pm
Do you NEED a credit limit increase? In the past, Chase has simply raised my limit and then notified me.
Getting high limits when one "needs" it can be difficult. It's generally easier to build limits when one doesn't need to use the available credit as revolving utilization is a very significant factor. Additionally, while you have received automatic credit limit increases from Chase, not everyone does even if their credit would support it.

However, the OP should clarify what the intent is behind the credit limit increase if feedback is desired.
Dottie57 wrote:
Tue Oct 17, 2017 6:56 pm
What do all of you charge that you need such large limits.
It's not just about what I charge. It's about revolving utilization. I only have about $6K in regular spend each month but my limits allow me to spend that much and only have a revolving utilization of 4% report which is very low. If I only had $6K in limits then I would be reporting at 100% and that would be a major problem. Even at 90% a card is considered maxed. Even at lower revolving utilization levels there are hits to one's scores and credit profile. The general recommendation is to not exceed 30% but even 30% is well above ideal which is under 10%.
Last edited by takeshi on Wed Oct 18, 2017 8:51 am, edited 5 times in total.

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White Coat Investor
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Re: Is it worth applying for Credit Limit Increase?

Post by White Coat Investor » Wed Oct 18, 2017 8:47 am

Dottie57 wrote:
Tue Oct 17, 2017 6:56 pm
What do all of you charge that you need such large limits.
Taxes in my case.

I had gotten increases pretty routinely until I got to about $90K. Then they started wanting more verification. I think they wanted to see tax returns. I haven't bothered doing that so far, but there are times when I'd pay more than that in taxes on that card if I had the credit limit to do so. The work around (sending a check) isn't that big of a deal though, so I've just been doing that.

The main reason people want higher limits isn't necessarily to charge that much, but simply to have a lower utilization ratio for what they do charge.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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mhc
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Re: Is it worth applying for Credit Limit Increase?

Post by mhc » Wed Oct 18, 2017 9:13 am

$13k is pretty low for your salary. A couple of major purchases in a month could push over the limit.

$5k for furniture, $5k vacation, $4k normal spend, $3k Christmas presents, $5k watch, ...

It is also good to have additional head room to serve as an emergency fund.

adamthesmythe
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Re: Is it worth applying for Credit Limit Increase?

Post by adamthesmythe » Wed Oct 18, 2017 9:27 am

I can't see why you would ask for an increase if you didn't need it.

I did this once, ever, so I could pay the moving man.

In any case- even though fraudulent charges would be reversed- I would feel less comfortable carrying around cards with really huge credit limits.

ascension
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Re: Is it worth applying for Credit Limit Increase?

Post by ascension » Wed Oct 18, 2017 6:36 pm

adamthesmythe wrote:
Wed Oct 18, 2017 9:27 am
I can't see why you would ask for an increase if you didn't need it.

I did this once, ever, so I could pay the moving man.

In any case- even though fraudulent charges would be reversed- I would feel less comfortable carrying around cards with really huge credit limits.
It's simply to lower my credit utilization %. I don't really plan to spend much money in near future (maybe for a car?)

How about if I apply for a card and never use it? Wouldn't that help for lowering credit utilization ratio?

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MrDogg
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Re: Is it worth applying for Credit Limit Increase?

Post by MrDogg » Wed Oct 18, 2017 6:45 pm

A credit card credit line increase helps your FICO score. This is because it improves your available credit to loan balances ratio. Most credit card companies will grant you an increase with just a phone call, other times they make you jump through a couple hoops such as updating your personal information with salary and other income sources.

cheesepep
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Re: Is it worth applying for Credit Limit Increase?

Post by cheesepep » Wed Oct 18, 2017 7:01 pm

Whenever I used to login to pay my credit card bill, my cc company has a silly banner on top that cannot be closed asking me to update my income for 2017, so that they can consider me for a higher credit limit. I do not care for a higher credit limit as I am content as is, and I don't want to provide any more information than I have to, but that banner persists and is in bright colors.

What I do is use Adblock and block that part of the website as being an ad, so I never see it again!

BTW, I do this for many other sites who bug me for one thing or another. Really makes my life easier.

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JMacDonald
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Re: Is it worth applying for Credit Limit Increase?

Post by JMacDonald » Wed Oct 18, 2017 7:46 pm

If you only have one card, you might consider getting a second credit card. I was on a trip when my AE card was cancelled by mistake. I was happy that I had the second credit card. That will also serve the purpose of having a higher credit limit with the second card.
Best Wishes, | Joe

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