The higher the credit limit, the more you get to spend with your credit card. When you apply for a credit card, once you hear the exciting news that you’ve been approved, all you want to hear is “ what credit limit did I get approved for??”.
Why You Want A High Credit Limit
With a higher credit limit, whatever you spend on the card will take up a smaller percentage of the credit limit than it would if your limit was lower. That’s how you have lower credit utilization on your account, which is having a balance that is way lower than your credit limit. That’s a good thing and shows responsibility and that credit limit is decided when you get approved for a new credit card.
How You Can Predict What Your Credit Limit Will Be
So, skip the suspense. Can you predict what limit you’ll get approved for when applying for a new card? Probably yes. Who decides what your credit limit will be? The credit card issuer does and they follow guidelines to do so. So what you can do is study those guidelines before submitting a credit card application so that you know what to do to help yourself strike higher.
The Credit Card Database
Before we get to that, there’s something else you can do to navigate credit card applications and anticipated credit limits. You can leap over the how’s, what’s, and maybe’s, and visit this credit card database. The database is an extensive resource where many applicants, just like you, share their experience. You can share too. That’s where many credit cards get listed daily, along with if the applicant was approved for the card or declined, what his current credit score was, what credit limit he was approved for, which credit bureau pulled his credit report, and more.
Browse through the database before you decide what to apply for and aim for a high credit limit. It will definitely give you a clearer idea of what you can expect.
We did mention earlier that the card issuers have guidelines they follow and that knowing what they are and where you stand, will help you know what credit limit to expect.
Just like you trust a friend more than a stranger, so too, credit card issuers or banks, will trust you more when you already have a relationship with them and will accept you more easily. What you should do about that is apply for a credit card with a bank that you already have a credit line with. Because you have their trust you can expect them to set a higher credit limit for you than if you would go to a completely new bank where they wouldn’t even know you.
Increased Current Credit Limits
A bank or an issuer will always check to see what your current credit limits are. They wouldn’t want to be the first ones to set your highest credit limit ever. Therefore, before you even apply for a new card, call up the banks you already have accounts with and ask them to increase your current credit limits. When the bank you’re applying with will see how high your credit limits are, they’ll give you a higher one too!
What we’re trying to do is to predict what your credit limit will be. In that case, know that if you apply for a travel card or for a card that has an annual fee, you can expect to get approved for a higher credit limit. If you apply for a card with no annual fee, you can expect a lower credit limit. It’s just the way the card issuer see’s things; you have to pay for a card with more value, and if you can pay for that, you earn a higher limit. For example the Chase Sapphire Reserve has a starting credit limit of $10,000!
No New Accounts
The bank wants to approve you and set a high limit only if you are responsible. You shouldn’t have too many new accounts opened within the past 24 months. They’ll see you as irresponsible and will either not approve you, or not give you a high credit limit, so that they can control how much money you’ll be spending.
Match Current Limits
Try to predict your credit limit by having the issuer match a current credit limit. They might agree, they might not. You shouldn’t be afraid to ask more than once and try for a high number.
Keep these points in mind and you’ll be able to give yourself an estimated credit limit by comparing your information to the information the credit card issuer will look at when weighing your application.
The best of luck!