There is a fairly wide selection of Capital One credit cards; the issuer’s card lineup covers various categories and income levels. Over time, a customer could work his or her way from a basic Capital One credit card to the issuer’s upper-end products with their perks and bonuses.
A popular alternative is to get a higher credit limit, which takes some time, diligence, and planning. Luckily we’re here to help. Here’s our guide to getting a Capital One credit increase.
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Are you eligible for a Capital One credit increase?
In order to be eligible for a credit limit boost, a Capital One credit card account has to meet the following criteria. It must:
- Not have gotten a credit limit increase or decrease within the preceding six months.
- Be over three months old (and perhaps older; anecdotal evidence suggests that Capital One often declines requests from accounts younger than six months).
- Not be a secured credit card.
Assuming you’ve surmounted these hurdles, Capital One lists the following factors as key determinants for credit limit increase eligibility:
- Whether or not you pay your credit card statements on time (note: this includes all of your cards, not just Capital One products).
- You habitually pay more than the minimum payment, indicating constant reduction of outstanding debt.
- Your personal information is as up-to-date as possible. This not only concerns personal and family details, but income sources and amounts. Capital One recommends updating this at least once per year.
An excellent tool for drilling down into the details of your credit score — and, crucially, how it can be improved — is Capital One’s CreditWise. This is a smart device app offered free of charge not only to Capital One cardholders, but to anyone carrying debt who’s eager to monitor their score.
When to ask for a credit limit increase
Just because you stand a decent chance of scoring a credit limit increase doesn’t mean you should. Credit cards are not piggy banks and they shouldn’t be used for excessive spending sprees; it’s highly unwise to adapt an, “I’ve got it, so why not spend it?” mentality with your newly bestowed credit.
If, however, your expenses are still comfortably below your income and there’s room in your budget, a credit limit increase could help finance additional outlays.
There are times in a financial life where it’s not advisable to shoot for a credit limit increase, of course. There are a great many reasons for this; to name but two major ones:
- Your credit score is low. Experts advise would-be credit increasers to request a boost only if they have good to excellent credit (requests are usually handled with hard credit inquiries, which can further reduce a score).
- You’ve moved to lower-paying work, or are “between jobs.” Creditors won’t be happy to see the income drop, and likely will be more inclined to refuse a request. If they do say yes, the additional credit could tempt you to spend beyond your reduced means.
Automatic credit limit increases
Of course, an ideal situation as a Capital One credit card holder (or any issuer’s plastic, come to think of it) would be to receive a credit limit increase without doing anything.
Some new Capital One cardholders have been pleasantly surprised to receive a credit bump within the first half-year of owning their card. It seems that the issuer automatically lifts the credit limit for certain cards in its family after the owner has made their first five payments on time.
Also, credit card issuers tend to review their accounts every six months as a matter of course. They like to award credit limit increases to cardholders that demonstrate smart and capable debt management (chiefly paying statement balances on time and, ideally, in full).
Naturally, you shouldn’t count exclusively on Capital One’s generosity for a credit limit improvement; sensible and prudent management should always guide you when handling credit card accounts.
Applying for a credit limit increase
As with most other credit cards, there are several ways to request an increase in your credit limit with Capital One. Arguably the easiest is by phoning the issuer directly, or online through your account’s web portal.
No matter the media you choose, Capital One will want to know certain key pieces of information from you, most notably:
- Employment status
- Total annual income
- Monthly mortgage payment (or rent, if on a lease).
Capital One takes pains to stress that this data meets Federal requirements for the information needed in a credit limit increase request.
Good practices when asking for a credit limit increase
Every card issuer has slightly different criteria when evaluating a credit limit increase request from a cardholder. But you can be certain that nearly every issuer prioritizes the classic data points of the requester, heavily weighing items such as their income, credit utilization, major expenses, etc.
There have been many thousands of words written by experts about what constitutes the right and wrong ways to ask for a boost in credit. We can generalize this advice by zeroing in on a few smart tips that should work for most issuers, Capital One included.
Ultimately, credit is about trust and faith. Your creditor must go to sleep at night comfortable with the fact that you’ll pay back the money. With that in mind, when making your request it’s advisable to get across the following (note: this is obviously far easier to do if requesting by phone):
- Emphasize how responsible you have been in paying on time
- Point out how frequently you pay your balance in full (hopefully, more times than not)
- Note by how much your total income has increased, if in that happy position.
- Note by how much your expenses have decreased, particularly your housing costs.
- Make your request reasonable; experts say a good rule is to ask for a maximum lift of around 25% above your current credit limit. This is a general tip — it doesn’t apply to Capital One, which says it determines the new limit itself in the case of approval.
View more information: https://www.fool.com/the-ascent/credit-cards/articles/how-to-increase-your-capital-one-credit-limit/