I have two credit cards (through the same bank). The first I got at age 18, and the 2nd I applied for while in grad school for better rewards. I use credit cards (primarily the more recent one) for routine monthly expenses and I pay them off in full every month and reap the rewards. The limits were pretty low while I was in school, but every 6 months or so they would notify me that they were raising my credit limit by a modest amount. This continued for a while, but it stopped not long after I left school (which roughly coincided with banks becoming more reluctant to offer credit).

My income has increased several hundred percent over what it was while I was in grad school, and I feel my credit limits do not reflect that. My combined credit limit between the two cards is a little over 12% of my yearly gross income. I feel this is probably low, and I might like to increase it both to increase my credit score and to easier allow for multiple large purchases (computer, furniture, etc.) in the same month without using an excessively high portion of my available credit. What guidelines should I use to determine how much of an increase, if any, to request?

Just call them and ask. It is pretty routine to do so. In fact, most of my credit cards have a way to ask for those online without even talking to a person.

There's no harm in asking the person on the phone for whatever amount you want, if it is too high they will tell you the max they will go to. The worst they can do is say no.

As to how much to ask for. I suggest asking for about 3x as much as you think you would ever charge on the card to keep your credit utilization percentages low.

They probably stopped raising your limit because of the credit crisis and new regulations. If you are planning a large purchase then call them and ask for a higher limit. Although with current rates you might be better off finding financing through the retailer or getting a new card with promotions. If you have a good credit score you shouldn't have a problem either way.

I don't think raising a limit "just because" makes a lot of sense. Some say it effects your credit score in the long run, but chances are they'll pull your credit when you ask for a raise and that will just lower the score.

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    Sure they will pull my credit score if I ask for an increase, but won't that effect wear off shortly as opposed to the long-term benefit from the increase in limit? – Michael McGowan Apr 28 '11 at 2:25
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    If you talk to them on the phone, they can tell you the limit they can raise your credit without pulling your credit. If you want to go above that limit they will then have to pull your credit. The credit card companies routinely run 'soft' credit inquiries throughout the year (these do not affect your credit score) so they have some knowledge of your credit worthiness without pulling a 'hard' credit inquiry (that will affect your credit score), and they can use the information from the soft inquiries to go up to a certain limit without pulling a hard inquiry. – ljkyser Apr 30 '11 at 21:01

I think it would be hard to make the decision based on your credit score, b/c there are always different answers about what affects, and how much. If you don't make big mistakes, like defaulting, I'm sure your credit score will take care of itself.

If you feel like you want more flexibility in your limits, then call and see what you can get. I have around 6 cards, at least 2 have limits over 10k, and my credit score has been over 800 for years. I've opened and closed various cards, and had limits rise over the years and haven't been constrained in getting mortgage or refinancing.

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