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I applied for a credit line increase from Capital One a few weeks ago. A few days ago I got a letter indicated that the increase request was rejected. The two reasons stated were:

  • Primary cardholder current accounts not used enough
  • Primary cardholder insufficient experience with high lines of credit on Capital One Accounts

I have two cards with Capital One, both with roughly the same limit. That limit is about 10% of my (household) annual income--about 5% each. I have one other major card, an American Express, which adds roughly another 2.5% of my annual income.

I use one of the cards for everything I possibly can, as it has the better rewards. I pay it off in full each billing cycle. I pay off the other cards in full each month, but I only use them for specific purchases (e.g. Costco only accepts Amex, some old subscriptions still charge to my other Capital One card).

My Equifax credit score is 813 (per the letter).

Needless to say, I was surprised to get this rejection letter. I have excellent credit, no revolving debt and a low (I think) ratio of credit limit to income. I also use my credit card a lot, regardless of the first bullet point above.

Does the company dislike customers who don't pay any interest or fees? Or is 12.5% of income a fairly standard credit limit across all cards?

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    which credit card did you request the increase for: the one you use for almost everything or the one you seldom use? – mhoran_psprep Sep 1 '14 at 23:29
  • The one I use for almost everything. – Phil Sandler Sep 2 '14 at 2:26
  • Shall I assume that your credit line increase request was made online? – Noah Sep 2 '14 at 16:35
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    Consider calling CapitalOne and asking them to combine the two cards: cancel the one you don't use, and double the credit limit of the one you do use. – Ben Miller - Reinstate Monica Sep 2 '14 at 16:36
  • I actually asked them that when I called initially. The rep told me that the credit limit on one card has nothing to do with the credit limit on the other. That made no sense to me, but that's what he said . . . – Phil Sandler Sep 2 '14 at 16:49
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I think they gave you the answer: You haven't previously shown that you can run that particular card up to (near) its existing maximum and then pay it off, so they don't have a strong indication that you can handle that large an unsecured loan. Generally, requests to have the limits raised when there isn't evidence that the customer is finding the current limit inconvenient are going to be considered suspicious.

Remember, a great credit rating does not require that they consider you a good risk -- it's just one of the things they consider.

Why do you need the limit raised? Have you tried contacting the bank's credit department directly and discussing what they will or won't let you do?

Re paying off the card every month: Remember, they do get a processing fee from the vendor. They'd prefer that we paid interest (I'm told the term of art for those of us who don't is "deadbeats"), but they certainly don't lose money when we don't. And they'd generally rather have us be loyal customers who MIGHT someday pay interest, and who are bringing in fees, than have us go elsewhere.

  • Basically I will have some large purchases in the next six months that I could pay cash for, but would prefer to run through the credit card (to get rewards). If I were them, I wouldn't want me to do that either. :) I'll see if I can speak directly to their credit department, although I did make the request through a conversation with a live customer service rep as opposed to via an online form. – Phil Sandler Sep 2 '14 at 2:29
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    @PhilSandler Call the credit card company and tell them what large purchases you want to make. Tell them that you are requesting a credit-line increase so that these charges can be put on their card instead of, for example, charging only two (expensive) airline tickets to CapitalOne and three tickets to CitiCard so as to meet the credit-line limits on Capital One. I have done this kind of thing several times and it has always worked. They would much rather have you charge big bucks to their card than to the other company's card. – Dilip Sarwate Sep 2 '14 at 14:21
  • @PhilSandler Not too long ago I got a credit line increase (not with CapitalOne, though) when I made it clear that my primary motivation was getting the rewards on a large transaction. However, they could see me using the majority of my limit (they had originally given me a low limit) and paying it in full multiple times. (The account was configured for automatic payment in full as soon as I opened it.) – Loren Pechtel Sep 2 '14 at 17:54
  • I think most of these commenters are right. Credit cards are meant to be a convenience not a means. – Brian Sep 2 '14 at 18:50
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The bottom line is that you are kind of a terrible customer for them.

Granted you are far better than one that does not pay his bills, but you are (probably) in the tier right above that.

Rewards cards are used to lure the unorganized into out of control interest rates and late payments. These people are Capital One's, and others, best customers. They have traded hundreds of dollars in interest payments for a couple of dollars in rewards. The CC company says: "YUMMY"!

You, on the other hand, cut into their "meager" profits from fees collected from your transactions. Why should they help you make more money? Why should they further cut into your profits?

Response to comment:

Given your comment I think the bottom line is a matter of perspective. You seem like a logical, altruistic type person who probably seeks a win-win situation in business dealings. This differs from CC companies they operate to seek one thing: enslavement. BTW the "terrible customer" remark should be taken as a compliment.

After you get past the marketing lies you begin to see what reward programs and zero percent financing is all about. How do most people end up with 21%+ interest rates? They started with a zero percent balance loan, and was late for a payment.

Reward cards work a bit differently. Studies show that people tend to spend about 17% more when they use a reward card. I've caught myself ordering an extra appetizer or beer and have subsequently stopped using a reward card for things I can make a decision at the time of purchase. For people with tight budgets this leads to debt.

My "meager" profits paragraph makes sense when you understand the onerous nature of CC companies. They are not interested in earning 2% on purchases (charge 3% and give back 1%) for basically free money. You rightly see this as what should be a win-win for all parties involved. Thus the meager in quotation marks. CC companies are willing to give back 1% and charge 3% if you then pay 15% or more on your balance.

Some may disagree with me on the extracting nature of CC companies, but they are wrong. I like him as an actor, but I don't believe Samuel Jackson's lines.

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    A customer who pays all credit-card balances in full each month but charges a lot is better for the company than a customer who pays all credit-card balances in full each month but charges very little. The credit-card company is making money off the customer paying each bill in full in timely fashion. Why not encourage the customer to spend even more and so generate more revenue for the CC company? With some luck, the customer may over-extend and then the CC company has the the customer on the hook for interest and possibly late payment fees etc. Your last paragraph does not make any sense. – Dilip Sarwate Sep 2 '14 at 14:13
  • Answer edited to address your concerns. – Pete B. Sep 2 '14 at 17:33
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    I was not the one who down-voted your answer, but it appears that you prefer to rant about the evils of credit-card companies rather than address the question asked by the OP. – Dilip Sarwate Sep 2 '14 at 18:27
  • I think there is a proper forum for this type of rant, but this isn't the site. Maybe start a blog. – Brian Sep 2 '14 at 18:49
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    While I tend to agree with Pete's point, (and I believe it to be true generally of credit card companies) I am having a hard time in this particular case agreeing this is the correct answer. I would phrase it as "credit card companies are pretty eager to give you enough rope to hang yourself." That being said, it is certainly an answer and deserving of votes. – MrChrister Sep 2 '14 at 19:45

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