Poor credit can have a big impact on your finances. One of the many ways bad credit can wreak havoc on your spending plans is that obtaining a high credit limit can be challenging.
The reason behind the difficulty is that lenders are less willing to provide spending power to borrowers who have yet to prove their creditworthiness. But even if you have bad credit, you may still be able to give your credit limit a boost.
Don’t let bad credit stand in your way! Let’s take a closer look at how to get a high credit limit credit card with poor credit.
Typically, a high limit credit card comes with a line of credit of at least $5,000. The limit can far exceed $5,000. In some cases, issuers are willing to provide $100,000 lines of credit. But the exact limit will vary based on your qualifications and your lender’s criteria.
In some cases, you might have a particular credit limit in mind. For example, you might want a credit card with a $4,000 limit to allow for putting all of your expenses on the card before paying it off at the end of each month.
Ultimately, the right credit limit can help your finances flow smoothly each month.
If you have bad credit, obtaining a high limit credit card can be difficult. Essentially, that’s because lenders are not quite ready to give you access to an extensive credit line. Even if you are able to find an unsecured credit card with a reasonably high limit, you might find an extremely high interest rate or heavy fee structure.
The good news is that you can likely obtain a credit card of some kind. With that in hand, implementing responsible credit management strategies will put you on the path to a high limit credit card.
It may not happen overnight. But it is entirely possible for you to get a high limit credit card with poor credit as a starting point.
A high limit credit card can offer more flexibility for your cash flow.
But that’s just one of the many benefits of carrying a high limit credit card. Credit utilization is another big reason why many want a higher limit. With a high limit, you can keep your credit utilization ratio low. This means your credit score may experience a boost!
Whatever your reason for pursuing one, here’s how to get a high limit credit card with poor credit.
Before you start looking for a particular card, start by looking at your current loans. If you have any late payments on the books, start by catching up on those.
Keeping your loans in good standing will look great when applying for new lines of credit. But if you have a history of late payments, a lender might not want to take a chance. After all, lenders need borrowers to make payments in order to recoup their funds.
One way to improve your high limit credit card application is to pay off existing debts. Of course, this strategy is easier said than done. But if possible, any extra progress towards your outstanding debts would have plenty of rewards.
First, eliminating any debt can significantly improve your finances. Without a particular monthly debt repayment obligation, your budget may suddenly seem much more flexible. Beyond that, a decrease in your outstanding credit would leave room for lenders to consider a higher credit card limit.
A secured credit card could be your best opportunity to obtain a high limit credit card if you have bad credit. However, a secured credit card works differently from a traditional unsecured credit card.
With an unsecured credit card, the lender issues a line of credit without any physical asset to hold as collateral. But with a secured credit card, you’ll have to put down a cash deposit before you can start using the card. Typically, a secured credit card limit is tied closely to the cash deposit.
For example, let’s say you put down a $500 deposit on a secured credit card. With most lenders, you would have a $500 limit to spend on that card.
Opening a secured credit card with a high deposit could be a smart move depending on your cash reserves. It’s one way that those with the cash can get a high limit credit card with poor credit. But consider your other financial needs before making a large deposit. You don’t want to drain your entire savings account to open a secured card with a high limit. Instead, strike a balance that works for your finances.
If you want to give your credit limit a boost, there are a few strategies to implement. Here’s how to get started.
The most obvious way to give your credit limit a boost is to work on your credit score.
You can easily unlock high limit credit cards with a higher credit score. Building up your credit score may take time if you have a bad credit score. But luckily, it is entirely possible to steadily improve your credit score over time.
Typically, the first place to get started when building your credit score from bad credit is to take a look at your free credit report. With your free credit report in hand, look for any spots on your credit score that could be dragging it down. In some cases, you might discover incorrect information that is pulling your credit score down. If that happens, it is time to seriously consider credit repair.
If you are able to pull any bad marks off your credit report, you’ll likely see your credit score rise a bit.
If you want a higher credit limit on your existing credit card, a straightforward strategy is simply to ask for it. Take the time to call up your credit card company and directly request an increased line of credit.
In some cases, the credit card issuer will be willing to give your credit limit a boost. It really can be as easy as picking up the phone to ask for exactly what you want.
Although this strategy won’t work every time, it never hurts to ask. It can help to be prepared with why you want to increase your limit and share the changing details of your financial picture that supports your ability to keep up with the payments.
If you’ve been responsibly using your credit card, it is not uncommon to receive an automatic increase. The best way to prepare for an automatic increase is to make on-time payments consistently. You’ll want the issuer to feel comfortable boosting your credit limit.
This option can be difficult to predict. But as a credit card user that wants to experience an automatic increase, the best thing to do is continue using the card responsibly. You never know what kind of a credit limit increase may come your way!
If you have a secured credit card, you may be able to increase your spending limit by making a larger deposit.
Unfortunately, not every secured credit card will allow you to make additional deposits. But reading the terms and conditions before signing up for a particular secured credit card can allow you to keep this option open.
The downside to this option is that you’ll need more cash on hand to make a larger deposit. However, implementing this strategy could give you the increased limit you are after. Plus, continually using your secured credit card responsibly could lead to a higher credit score. In turn, a higher credit score could lead to better approval chances for a high limit credit card.
If you are maxing out your credit card, that will negatively impact your credit utilization ratio.
Credit utilization makes up a portion of your credit score. In fact, this ratio compromises 30% of your credit score. With that, consumers that have high credit scores typically have low credit utilization ratios.
Your credit utilization ratio is determined by adding up your credit usage and dividing that by the sum of your available credit. For example, let’s say that you have a credit card with a $1,000 limit and a balance of $500. In this scenario, you would have a credit utilization ratio of 50%.
If you maxed out your credit card, you would have a utilization ratio of 100%. That won’t help your credit score. Instead, that high credit utilization ratio will hurt it.
Most experts recommend that you keep your credit utilization ratio at 30% or less. With that, maxing out your credit card will inevitably hurt your credit score.
One way to keep your credit utilization score low is to increase your credit limits.
Credit is just one factor that lenders look at when deciding whether or not to issue you a credit card. Income is another crucial point that issuers take into consideration.
The amount of income you earn will inherently impact the amount you can afford to pay each month. A high income will not necessarily translate into a higher credit limit. But a low income will undoubtedly impact your ability to unlock larger credit limits.
If you have bad credit, the right high-limit credit card can be hard to come by. But some options stand apart from the crowd.
Here’s a look at some of the best high-limit credit cards for bad credit.
The U.S. Bank Secured Visa card offers qualified applicants the opportunity to make a deposit of up to $5,000. That’s a high credit line for a secured card! But you’ll need to have the funds available to make a deposit of this size.
Although there is a $29 annual fee, the high credit limit might be worth it to you. A big perk of this card is that your deposit will earn interest in a secured savings account. With that, the deposit can grow while you enjoy the benefits of a high credit line.
The Discover It Secured credit card requires an upfront security deposit of at least $200. But you’ll be able to make a larger deposit to unlock a high line of credit. The card will allow you to make a maximum deposit of $2,500 for a credit line of the same amount.
One of the best parts about this card is that you can add to your deposit over time. That gives you the flexibility to build up your line of credit as you have the funds available. Additionally, Discover will automatically assess your credit management at seven months. Discover will upgrade you to an unsecured card if you manage your secured credit card responsibly.
Finally, you’ll earn 1% cash back on all of your purchases. And 2% at gas stations and restaurants. All of these benefits come without the inconvenience of an annual fee.
The Credit One Platinum Visa for Rebuilding Credit is an unsecured credit card that could be the right fit for poor credit borrowers. If approved, you’ll receive a minimum line of credit of $300. That is on the low side. But you will be able to increase your credit line over time as you prove your creditworthiness.
Unfortunately, there is a $99 annual fee attached to the card. But if you are pursuing an unsecured credit card with poor credit, this is a worthwhile option.
The Reflex Mastercard comes with some relatively high fees. You’ll have to pay a $125 annual fee. Plus, a monthly maintenance fee of $10. Unfortunately, most of the cards available to poor credit borrowers have significant fees attached.
Although the fees are high, the initial credit lines available range from $300 to $1,000. If approved, that unsecured line of credit can help prove your creditworthiness.
If you make on-time payments for six months, you’ll see your credit limit double! That could be worth the fees if you are hoping to increase your credit limit as quickly as possible.
Although it may take some time and strategy, obtaining a high limit credit card with poor credit is possible. You’ll need to start with a secured credit card in most cases. If possible, seek out a secured card that will allow you to upgrade your credit limit over time.
After proving responsible credit management practices with your secured card, you’ll increase your chances of getting a high limit credit card. Additionally, working to repair your credit may accelerate your journey to the high credit card limit you desire.