How frequently can you ask for a credit increase?
Your small business credit card might not offer you as large a line of credit as you need. The solution is often to request a larger line of credit, but you can’t do that every day. There’s also no industry-wide limit on how often you can request a credit line increase on your small business credit card. So how often you can make a request for a larger credit limit will vary based on the card issuer. Read on to learn more!
Recommended: Learn How to Build Business Credit to help establish your business’s fundability, get lower interest rates on loans, higher lines of credit, and sign up for all of this in your business’s name, instead of yours.
Examples of How Often You Can Request a Credit Line Increase
Capital One has a very competitive line of small business credit cards that it markets under its Spark brand. With these cards, you can only request a credit limit increase every six months. Also, your account must be less than three months old.
American Express also offers numerous credit and charge cards for small business owners. It also limits you to one credit line increase every six months, and your account must be open for at least 60 days. However, if you are denied a credit line increase, then you must wait 90 days before applying again.
But to find out how often you can request a credit limit increase from other card issuers, you should contact their customer service by phone, secure message, or a secure chat session.
How to Request a Credit Line Increase to Your Small Business Credit Card
With most card issuers, you can request a credit line increase by phone or online. Regardless of how you choose to make your request, there are several pieces of information that you’ll likely be asked for. This can include your annual income, your employment status, your monthly mortgage/rent payment, and your monthly spend with credit cards. You may also be asked for information about your business including your annual revenue and expenses, as well as your anticipated financials. Finally, you might be asked for the reason you are requesting a credit line increase to your small business credit card.
How to Maximize Your Chances of Being Approved for a Credit Line Increase
While many people will apply for a credit line increase to their small business credit card, there’s no guarantee that they’ll be approved. But if you need a credit line increase, and you’re going to go through the time and effort to request one, then you should first take steps to increase your chances of being approved.
There’s an old saying that banks only want to lend money to those who don’t need it. That observation relies on the fact that banks don’t want to extend more credit to someone who is already utilizing much of their existing lines of credit. Or to put it in plain terms, banks don’t want to make a loan to someone who’s already out of money.
The implication is that banks are more likely to increase your credit limit if you don’t have outstanding balances. So to increase your chances of being approved for a credit line increase, you should first try to pay off as much of your existing balances as possible. This includes not just the credit card account that you are requesting a credit line increase for, but other personal and small business credit card accounts as well.
Furthermore, you not only need to pay off as much of your balance as possible, but you also have to wait until your statement closes and the new balance is reported to the major credit bureaus. Only then will your new balances be reflected on your credit reports and credit scores.
You’ll also want to report all of your eligible income. This includes any investment income, government benefits, alimony, and child support payments. You can also include the income of your spouse or domestic partner, so long as you have a reasonable expectation of access to those funds for the purpose of repaying a loan.
You should also be able to explain to the card issuer why it is you need a credit line increase. For example, you may be using your card more as your business grows, our you may have decided to use your small business credit card as your primary method of payment instead of other forms of payment.
And while it won’t affect your total line of credit, you could always request that a portion of your existing credit line in another small business credit card account be transferred to another account. This can be useful when you wish to use one account much more than another.
When Not to Request a Credit Line Increase
You should avoid requesting a credit line increase to your small business card when you already have a very large current balance on it or on your other small business or personal credit cards. When you do this, your card issuer may suspect that you’re having trouble paying your bills and that you represent an increased credit risk. At the same time, your credit score will probably be lower than usual when you have large outstanding balances on one or more of your credit cards.
It’s also a bad idea to request a credit limit increase if you’re currently late on a payment. Being just a little bit late on a credit card payment isn’t a big deal, but you should certainly make your payment and put your account back into good standing before requesting a credit line increase.
A credit line increase on your small business credit can be extremely valuable, but there’s only so often that you can request one. The frequency of requests can differ by the card issuer, but it’s often every six months. By taking some time to pay off existing balances, and by reporting all eligible income, you’ll increase your chances of being approved. And with your increased line of credit, you’ll enjoy more purchasing power that can give your company the opportunity to thrive.
Recommended: Not sure which card you should pick? Check out our recommendations on the 4 Best Credit Cards for Building Business Credit.