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I just opened a credit card like a month ago. I have another credit card that I've been using for about a year now. But I was wondering if it is a bad idea that I raise credit on the new credit card that I just got a month ago.

Also, would it be possible if I raise credit line on my old CC together?

EDIT

So I went ahead and raised my credit card limit. Don't know what maximum I could've gotten, but after a few days. It did raise my credit card limit. However, I had credit karma, and it emailed me telling me that there was a hard check of some sort. So I'm assuming that raising the credit limit, they performed this hard check before giving me the amount.

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The real question may be: why did you get a new card, if you still have a need to increase the limit on both cards? –  mhoran_psprep Jun 28 '12 at 10:51
    
Because of its benefits –  andiruleu Jun 28 '12 at 13:55
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3 Answers

up vote 8 down vote accepted

Perhaps the right question you should be asking yourself is why you need the higher limit.

If you pay your credit card off in full every month, and you need a higher limit just to give you the extra flexibility and cash flow, then that seems sensible.

If you want a bigger limit just for the sense of security of being able to draw that much credit, but don't have plans to use it, that also seems like a legitimate rationale, however many credit cards seem to increase your limit automatically over time (presuming you've got good credit, etc.) so it may not be worth worrying about too much.

If you need additional credit limit to help pay for a one-time purchase or are simply wanting to improve your credit rating, you should really explore other debt options such as a line of credit at your bank, or a personal loan. Particularly these days you can get a much better interest rate than you can with credit cards.

It's ironic but true that to get a higher credit rating you need to incur debt. At least, in the US. What I've been told by loan specialists is that showing responsible credit card use is okay but the best kind of debt for maximizing your credit rating is not credit cards but rather fixed loans like a car, house, college, or etc. that will have a specific monthly payment. Credit agencies apparently like to see evidence that you can use debt responsibly and demonstrate making payments reliably over a period of time. So, like join a local credit union and tell the teller you want to take out a small loan for purposes of building your credit rating, and buy a new computer, stereo, or whatever. Then make regular payments on that over a few years. Not only will this look better than credit card debt, it'll also be at a lower rate.

If you've accumulated a large amount of credit card debt, and are wanting the higher limit in order to accumulate additional debt, that may be a red flag that your finances are out of balance. It is seductively easy to rack up an enormous debt, but it can be extraordinarily laborious to get it paid off. Two of my family members fell into this trap (one while in college, the other while between jobs). At typical credit card interest rates of 15%, 20%, and even 25%, if carrying debt month to month the debt is going to grow very quickly. If you're in this case I'd say count your blessings for having a low credit limit and get some help getting the debt in control.

Finally, to actually answer your question, yes it's been my experience most credit card companies are quite happy to increase your credit rate. Often you can call their customer service phone number and get it raised instantly. And I think they'd send you a free noose as well. ;-)

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+1 Excellent answer! –  Dilip Sarwate Jun 28 '12 at 11:07
    
Will they look into my credit report again? Like as if you're adding a new credit card? I heard that looking into my report will lower my credit score? I have excellent credit as I'm still building. I just graduated from college about a 1.5 years ago. I'm good with my debt (no debt end of month). I ALWAYS pay it off, and I would like to have more credit limit for future payments of goods. I wouldn't buy something that I know I'd have to pay off in months. I only buy goods that I know I HAVE the money. –  andiruleu Jun 28 '12 at 13:59
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+1 for your answer. However if the OP is in the US, don't forget that credit utilisation plays a major role in your credit score so having a higher but unused limit is actually rather beneficial to your credit score. –  Timo Geusch Jun 28 '12 at 15:21
    
Quite true, I did mention improving credit ratings but can elaborate on that. –  Bryce Jun 28 '12 at 18:39
    
@andrewliu They should not do a hard pull (the kind that affects your credit score) to check if they can give you a credit increase. Hard pulls require explicit permission from you. –  Steven Jun 29 '12 at 15:27
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It depends on the company but requests for a credit limit increase CAN result in a hard pull and show as an inquiry on your credit report. Always ask the rep before you proceed.

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Credit karma informed me, after requesting a credit limit increase, that I had a hard inquiry... So this did create a hard pull on me. –  andiruleu Jun 30 '12 at 22:03
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I will be bold and say that yes, it is a good idea to periodically ask for credit limit increases. Or to be more precise, it shouldn't work against you in the long term (if you can exercise fiscal caution, of course).

As far as I know, it will not hurt your relationship with the card-holding company to ask for an increase. The worst they can do is say no. If they do say no, I doubt they even log it in your file, unless you are harassing them about it. They may do a "hard pull" on your credit which will show up in your credit report, but it should only affect your credit score by a few points and for a few months,

And if they say yes, then financially speaking, this is only good for you. Having more credit available helps your credit score. It also means you have some headroom if you have an emergency expense.

The flip side is that, with great power comes great responsibility. Having a higher limit could tempt you to spend more, or to carry more of a balance. Having a better credit score may make you eligible for purchases that are bigger than you can handle. You should examine your motivation for wanting a higher limit, and the possible pitfalls that could arise from having this option. But these cautions apply to any financial decision.

Update: edited to include new hard pull data.

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Well my most concern is credit score. How much will it affect my credit score if they try to look into my credit again since I already got approved recently. Too much looking will cause problems, no? –  andiruleu Jun 29 '12 at 20:23
    
See my reply to your other comment. Credit card companies can see your credit log without doing a hard pull, so their research should not affect your credit report/score. –  Steven Jun 29 '12 at 21:24
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