Being approved for a high limit credit card is not difficult if you have qualifying income and a good credit score. Barring that however, you may have to go through a lengthy process, which begins by getting a low limit card. This is the way most of us eventually qualify for high limit cards, by the way.
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Before beginning to apply for high limit credit cards, you should probably find out what your credit score is. That’s because your credit score is the single most important factor determining what your initial credit limit will be. According to the Federal Trade Commission, every adult consumer in America is entitled by law once a year to a free credit report recorded by the three major credit card reporting agencies:
How do I get a copy of my credit report from these agencies?
There are three different methods for acquiring your annual credit reports. The first is to contact each of the agencies individually via their website or the telephone. In either case, you will be asked to verify your identity by supplying certain information as requested.
You’ll be given the option of receiving your credit report online or through the U.S. Postal Service. If you require a hard copy through the mail, you may have to pay a slight fee to cover printing and postage.
The second method is to use a third-party website, which provides access to all three credit agencies with a single application. Be careful when using these websites, as some of them are merely an attempt to trick you into paying for something that is by law, free.
There is a third option, but it is an option which gives you access to your credit report as many times during the course of a year as you desire. This is a service, which you pay a monthly fee for and often includes credit monitoring at the same time. These services can range in price from $100 annually up to nearly $500, depending on the scope of the services you choose.
Once I have my credit report, what’s next?
According to Experian, a credit score of 700 or better implies very good credit and financial management. You will need at least a 700 in order to get the highest limit credit cards on the market. A score between 600 and 699 is still fairly good, and should allow you to start with a moderate limit and quickly work your way up to a high limit as you do your part to maintain financial integrity.
Along with your credit score, you’ll need sufficient income in order to prove to the credit card company can make your payments. For example, if you’re looking for a credit card with a $20,000 limit, and your annual income is only $22,000, it is highly unlikely your application will be accepted regardless of your credit score. Your income must be commensurate with the amount of credit you’re seeking, compared to the amount of outstanding debt you still owe.
What if I’m rejected for a high limit credit card?
It is unusual for all but the wealthiest of individuals to get high limit credit cards on their first application. Most of us have to start with a low limit card and work our way up. But here’s a little secret: credit card companies are just chomping at the bit to raise your credit limit because they know it means you’ll spend money. All it takes on your part is a little financial discipline to see your limit rise substantially.
One of the best ways to do this is to get a low limit card and use it for all of your daily expenditures. At the same time, take the cash you would have used for those expenditures and put it into a savings account. At the end of the month, when the bill comes due, pay it off in full. This way you’re never paying any credit card interest and the credit card companies report your credit in good standing.
Once you establish a good relationship with your credit card company by making payments on time and keeping low balances, you’ll find that they will give you a higher limit on your credit card without you even asking. If you can demonstrate fiscal discipline you could see your credit limit go from a few thousand dollars to $15,000 or more in just a matter of a few years.
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