Requesting an Increase in Credit Limit by Letter

Many of us use credit cards and in spite of them being a major cause of financial worries to a lot of people, a well-managed approach in the use of credit cards can help people afford certain things which can be paid for over a longer period.

If you have an unblemished credit history and have run a credit card in an orderly manner over an established period of time, you are likely to have your credit limit automatically increased from time to time. This is usually as a ‘reward’ for managing your finances properly but it also gives the lender more of an opportunity to make additional money from you as the more you spend, the more likely you’ll have to repay in interest.

However, if you’ve not been automatically offered an increase in your credit limit, you can approach the lender to see if they will grant you one.

How to Write the Letter

In writing such a letter, you should firstly establish that you have been running your credit card correctly and that you have not missed payments or made late payments. It’s also important to ask yourself whether you really need an increase and, if you do, you need to be comfortable that you can cover the cost of any increase in repayments as a result of having a larger limit.

Quite often, people will waste their time asking for an increase in their credit and will be refused simply because they have missed payments or made their repayments late or have broken the terms and conditions of their credit agreement in some other way.

You are also more likely to have an increase granted if you offer a clear indication as to why you need the limit increased, although this isn’t always necessary and, providing you’ve run your account properly, most credit card companies will usually be more than happy to increase your limit, providing that you are in employment and you can meet the repayments.

As far as timing goes, you can write this type of letter anytime. However, you should have established your financial ‘good standing’ with the lender over a decent period of time. For example, there’s little point in asking for an increase if you’ve only had the card for a couple of months. Your lender will want to see that you can run a credit card correctly over a good few months, perhaps even a year, first of all.

What to Include in the Letter

You should also state your credit card number at the top of the letter and you stand more chance of getting an increase if the increase you want is not way above what you presently have. In other words, increases should be gradual. You shouldn’t apply for an increase to £5000 if your current limit is just £500 as you’re likely to be turned down. Furthermore, if you require such a large increase, your lender is probably likely to point you in the direction of a loan which would probably work out far cheaper. Additionally, don’t make repeated requests too often. If you’ve already been offered and have taken an increase recently, you should wait at least 6 months before applying for a further increase or else you’re likely to be turned down.