Did you just get approved for a credit card but it doesn’t seem to be the amount you were hoping for? Don’t be discouraged by a low limit Credit Card, instead take full advantage and consider this a start to a new beginning towards your financial freedom. There are a few things you can do to not only make the most out of your low limit card, but also set yourself up to having a higher limit in the future.
First and foremost, making a financial plan towards your credit is always the best start. Looking at your credits bigger picture can give you a higher trajectory in your overall credit score and credit history. You can do this by pulling your current credit score to see where you stand now. Dissecting the underlying reason as to why you weren’t approved for a higher credit limit can inform you and better prepare you in the long run. One thing you can do if your credit profile is thin is being an authorized user on a family member or trusted friends account with good credit. Being added to a card that has been open for 5+ years shows longevity in age of credit.
Building financial stability is also key in being approved for a higher limit. Not only can it help your credit score, but also can provide you with additional funds should an emergency arise. Using your credit card every time you find yourself in a tough situation shouldn’t be your end result. Start small with an emergency fund, and increase your savings should any additional income come into play. You can start by saving ass much as your credit limit, so if any unexpected expenses come up you are able to rely on your saved funds rather than your credit card.
Having a higher credit limit solely depends on how responsible the credit owner is. One thing you can do to prove your responsibility with credit is to keep your balances small. Keep in mind your credit utilization ratio when making purchases. Your ratio reflects 30% of your credit score, and it will also be easy to remember to keep your balance below 30% as well.
If there is anything that lenders pay close attention to it’s the timely fashion of how you pay your bill. One way to stay on top of your credit card payments is to set reminders or have automatic payments set up so that you will never miss a payment, even if it is the minimum payment on the bill.
With the help of these steps you will be well on your way towards a higher credit limit that you are comfortable and satisfied with. Most times, you wont even have to request for a raise in your credit limit. Most issuers will automatically recognize your efforts and raise it with you being notified of course. The appropriate amount of time to inquire about a raised credit limit ranges from 6 months to a year. Remain responsible even with a higher credit limit, however if your financial situation or income has increased then by all means also let your issuer know as well. Keep in mind that even if the low credit card didn’t hold much value in your eyes it still could be considered important in your credit history due to the standing length of that account!