Incomes Growing Faster than Debt in US
Having a high credit limit is beneficial, even if you do not intend to use it. It means that financial institutions trust you to borrow money and repay it. Having credit cards with a large spending capacity come in handy in case of emergency. You can also use these cards to make large purchases and pay them off, further improving your credit score and your financial standing.
Technology allows economic associations to track your spending habits, money managing skills, and your general response to having credit. Computer algorithms will also point out who which individuals are able to increase their limit without missing payments. So, technically, there’s no standard credit limit, just average ranges. However, there are ways to improve your standing so that you can get credit cards with a higher limit.
Financial History and Credit Limits
According to data collected through Experian in 2015, credit score determines how much money fiscal companies are willing to put at risk. The average ranges are:
- FICO scores between 781 and 850 average a credit limit of about $9,500 per credit card
- An average to good credit score of 661 to 780 lands a limit of about $5,200
- Standard or poor credit scores of 601 to 660 have a limit of about $2,200 per card
- Low scores that range from 600 to 500 have a $960 credit limit
- Credit ratings from 499 to 300 have a credit limit set at about $500
Once you apply for a credit card with an increased limit, the company will send you a letter of approval or denial, explaining how they made their decision. Once you know which areas of credit you need to improve on and make those changes, you can start applying for more rewarding credit cards.
What You Can Learn from Average Credit Limits
Boosting your credit score can potentially have a significant impact on the amount of credit you will receive the next time you apply for a credit card — the higher your credit score, the higher the credit limit you’ll receive. By reducing your debts and making payments on time, you can improve your rates.
However, individuals who have excellent credit don’t always have an average limit that is above $10,000. While there are credit cards that offer credit limits of $20,000 and more, it is usually difficult to qualify for them.
How to Increase Your Credit Limits
Ask your credit card company if they will increase your credit limit. If you have a history of making payments on time and your credit score is continually going up, there is a good chance that they will say yes.
When you ask for a credit increase, your card provider will check your credit with a hard inquiry. Most bankers will be able to see if you qualify on the spot. If you don’t, they can give you advice on how to improve your chances next time.
While having an increased credit limit can be highly beneficial, it often leads to overspending, resulting in an inability to pay back debt. This often provokes creditors to report your delinquency to the three major credit bureaus and, depending on the severity of your debt issues, they may even pursue legal action.
If you’re ever faced with such a situation, reach out to Heather Benveniste with Benveniste Law Offices. She has experience negotiating debt repayment terms for Illinois consumers and even representing them in court for debt lawsuits. Contact us today at 1-800-497-5358 for a free case evaluation.
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