Credit Cards

How To Get An American Express Credit Limit Increase – Forbes Advisor

· To request an increase, log into your online account and select “Request Credit Limit Increase” or call the number at the back of your card

Credit limits determine how much you can spend on any given credit card. Card issuers may increase your credit limit automatically, but in many cases you can request an increase directly from the issuer. High credit limits can help you make bigger purchases and help your overall credit utilization rate low. The key is to keep the balance low from month-to-month and make payments on time.

How to Increase Your American Express Credit Limit

Increasing the credit limit on an American Express credit card is fairly simple if your account is in good standing. Good standing means the cardholder has steady employment or income, on-time payment history and a good credit score. Keep in mind the length of time you’ve held a particular card can impact your ability to request a credit limit increase.

To request an increase, log into your online account and select “Request Credit Limit Increase” or call the number at the back of your card. Follow the prompts to make the request. Cardholders can also call the number on the back of the card to speak to a representative and make a request over the phone.

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Remember to keep the increase request reasonable, like 10% to 25% more than your current limit. If your limit is $1,000, asking for an increase to $10,000 may or may not be approved, or may result in only a portion of the requested increase being approved.

Do credit limit increases happen automatically?

Yes, some card issuers—including American Express—may increase a cardholder’s credit limit automatically.

An automatic increase can happen as often as every six months if cardholders:

  • Use the card frequently
  • Consistently make on-time payments
  • Keep a balance low
  • Report a recent income increase
  • Maintain a good credit score.

Card issuers use a variety of information to determine whether cardholders are eligible for an automatic increase, including credit history and income. Keeping your income updated on your account may improve your odds.

Pros and Cons of Higher Credit Limits

Pros of Higher Credit Limits

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Getting a higher credit limit is often a sign you’re in good standing with the credit card issuer. You may automatically receive a higher limit when you make a higher income than the prior year, keep up a history of on-time payments or maintain a good credit score.

A few pros to having a higher credit limit include:

  • Lower credit utilization rates. A higher credit limit can lower credit utilization rates by increasing the total credit limit available to cardholders as long as they maintain the same spending habits.
  • Credit score increase. Lower credit utilization, on-time payments and good spending habits can all add up to an increase in credit score.
  • More credit available for large purchases. A higher credit limit means there’s more wiggle room for large purchases like a brand new TV or appliance. Make sure to pay off the balance as quickly as possible to avoid spending high interest.
  • Improve standing for a new car loan or mortgage. Combining a better credit score with a history of on-time payments and a low credit utilization will put anyone in a good position to get lower interest rates on big loans.

Cons of Higher Credit Limits

There are a few risks to having a higher credit limit, especially if the consequences of higher spending are not considered carefully.

  • More available credit can lead to more spending. While having more credit can be a good thing, everyone should aim not to spend more than they can afford. Don’t spend more than can be paid off by the end of the billing cycle.
  • Greater risk of debt. Leveraging a higher credit limit to spend more can put you into a spiral of debt with unpaid balances and high interest rates.
  • Hard credit inquiries. While sometimes card issuers will perform a hard credit inquiry to raise a credit limit, particularly if the increase is requested and not automatically given to the cardholder, American Express does not perform a hard credit inquiry while evaluating a credit limit request. Too many hard inquiries in a short period can negatively affect credit scores (compared to a soft inquiry that has no effect).

What to Do If Your Credit Limit Increase Is Denied

Request for a credit limit increase denied? American Express might deny such a request for a few reasons.

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If you’ve requested an increase recently, American Express might deny a second request. Try again after more time has passed. Other reasons for denial could be a consistently high card balance, frequent late payments or a low credit score.

Don’t stress if the request is denied. Ask American Express representatives if they can provide a reason why, then work on improving the appearance of your perceived weak area over the next six months. Pay down any balance, pay bills on time and report income increases to American Express when they happen.

Another option is to apply for a new credit card with American Express or a different card issuer. While American Express does not perform a hard credit inquiry for an existing customer’s credit limit increase request, American Express and other issuers may perform a hard credit inquiry before approving individuals for a new Card. Opening a new credit card can come with added risks. If cardholders have trouble managing spending, opening a new credit card could lead to further debt. Keep in mind a hard credit inquiry could lower your credit score by a few points.

Bottom Line

Requesting a credit limit increase is pretty easy, but remember to be realistic when requesting an increase from the card issuer. Simply waiting for an increase is a good option because many card issuers will reward responsible cardholders with automatic increases. Limit increases could lead to higher credit scores and more spending capabilities. Make sure to maintain responsible spending habits and keep making on-time payments to boost your credit score.

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