How to Get a Capital One Line of Credit Increase – Forbes Advisor

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Credit card limits represent the amounts that cardholders can spend on their cards. Regular monthly payments help reduce a card balance so you have room to make more purchases, but sometimes there isn’t enough credit to make a big purchase. Or maybe you want to lower your credit utilization rate. To request a credit limit increase from Capital One, you can log into your account online or call Capital One directly. Credit limit increases can improve your credit score, give you more leeway for big purchases, and make you look good to future lenders.

How to Increase Your Capital One Credit Limit

Requesting a credit limit increase from Capital One is as simple as logging into your online account and submitting an electronic form. Enter the “Services” tab and click on “Request a line of credit increase”. Follow the steps to complete the application. If approved, the new credit limit will be available immediately.

Be sure to provide Capital One with accurate qualifying information such as total annual income, employment status, and monthly mortgage or rent payment. Capital One uses this information to determine if a cardholder is eligible for a credit limit increase.

Credit limit increase requests can also be made over the phone. Call the number on the back of the card to speak to a representative and inquire about a raise.

Some Capital One accounts may not be eligible for a credit limit increase. New accounts opened within the last few months, secured credit cards, or accounts that have recently received a credit limit increase (or decrease) may be automatically ineligible.

Do credit limit increases happen automatically?

Yes, credit limit increases can happen automatically if your information is kept up to date, such as employment status and total annual income. Cardholders in good standing (eg, good credit rating, regular on-time payments) may also qualify for an automatic credit limit increase once or twice a year.

If you request a raise from Capital One, approval may be immediate or take up to 30 days to process. Capital One will send a letter explaining the details of its decision if the application is not approved immediately.

Capital One approves cardholders for the highest amount it can offer. Cardholders can either accept the higher amount or opt for a lower limit (this is particularly useful if there is a risk of overspending).

Advantages and disadvantages of higher credit limits

Benefits of higher credit limits

Receiving a higher credit limit (automatically or otherwise) means your account is in good standing with a credit card issuer.

Capital One considers good reputation to include a history of on-time payments, larger frequent payments that pay off the balance, a good credit rating, and increased income reported to Capital One.

Having a higher credit limit has a few advantages:

  • Lower credit utilization rates. As long as cardholders maintain similar spending habits, a higher credit limit can lower credit utilization rates by increasing the total credit limit available to cardholders.
  • Increase in credit score. Credit scores can improve over time if cardholders have low credit utilization, make on-time payments, and have good spending habits. However, these are not all the factors involved in calculating a credit score.
  • More credit available for large purchases. A higher credit limit means there’s more wiggle room for big purchases like a brand new TV or appliance. Avoid high interest rates by paying off a large purchase immediately or making large payments over a few months.
  • Improve your position for a new car loan or mortgage. The combination of a better credit score with an on-time payment history and low credit utilization will put anyone in a good position to get lower interest rates on big loans.

Disadvantages of higher credit limits

Having a higher credit limit can be risky if cardholders aren’t responsible for spending.

  • More credit available can lead to more spending. It can be easy to fall into a spending trap when more credit becomes available. Don’t spend more than can be refunded at the end of each billing cycle if you can avoid it.
  • Greater risk of indebtedness. By spending more, cardholders become more likely to go into debt with a cycle of unpaid balances and rapidly accumulating interest.
  • Difficult credit inquiries. Card issuers may perform a firm credit inquiry to process a credit limit request (most likely if the increase is requested and not automatically granted). Too many serious inquiries in a short period can negatively affect credit scores (compared to an informal inquiry with little or no effect).

What to do if your credit limit increase is declined

Capital One will send a letter outlining the reasons why a cardholder’s request for a credit limit increase is denied. Use this information to improve your standing before reapplying.

Capital One’s review process considers a cardholder’s employment status, total annual income, payment history, balance, card activity and more. The best course of action after a decline may be to pay off a Capital One card balance, pay on time each month, or report an increase in income or change in employment status.

Regardless of the reasons for the decline, a cardholder can apply for a brand new Capital One card (or a card from another issuer) if the goal is to get more credit quickly. Receiving new card credit has, in many ways, essentially the same positive effects as receiving a credit limit increase. But only apply for a new credit card as a last resort – a credit card application leads to a thorough investigation, which could lower a credit score if done multiple times in a short period of time.

Conclusion

Requesting a credit limit increase from Capital One is as easy as logging into your online account to answer a few questions or calling the number on the back of the card. Requests may be automatically approved or may take a few days to process. Keep your account in good standing and update your information regularly so that you see an automatic increase once or twice a year. Be careful not to overspend as this can easily lead to increased debt.

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