Can Asking for a Higher Credit Card Limit Increase My APR?


Your credit card limit can have a huge impact on your credit score, because one of the most important factors in credit scoring is how much of your available credit you use. As such, requesting a credit-limit increase is an often-cited tip for improving your credit score (assuming you don’t also increase your credit card spending), but this strategy doesn’t come without risks.

One of the most important questions to ask yourself whenever you’re making a move to improve your credit is whether it will end up costing you money. If so, is it worth it?

Requesting a credit-limit increase won’t cost you upfront, like you might encounter if you transfer a credit card balance to a new card and have to pay a fee to do so, but you might end up paying in other ways. For example, if your credit card issuer makes a hard inquiry on your credit report as part of its decision to give you the limit increase, that could ding your credit score, which could result in higher interest rates on other credit you apply for in the near future.

Proper Advance Notice

While credit card issuers can increase the APR on your existing account as long as they give you proper advance notice, it’s not likely that requesting a credit-limit increase would raise the APR on that card, Nessa Feddis, senior vice president and deputy chief counsel at the American Bankers Association, said in an email.

“They can raise the rate for any reason if they give 45 day advance notice, and the new rate only applies to transactions made after the effective date,” she said.

Still, Feddis said she doesn’t know of any bank that uses requests for a higher credit limit to trigger an APR increase.

“The bank cannot automatically raise the rate absent some recent verification of income,” she said. “Thus, they encourage customers to make the request as [they] can then obtain the information from the customer.”

Even if your bank encourages you to ask for a higher credit limit, that doesn’t mean you should do it. There’s still the chance the bank will deny your request, so if you have reason to believe they will, asking for it may not make sense. As we mentioned earlier, it could hurt your credit score if the bank makes a hard inquiry on your credit report as part of the process, and you wouldn’t get the credit-score benefit of a higher credit limit to cushion the blow of the inquiry.

Before you apply for new credit, even with an existing creditor, it’s a good idea to see where your credit stands. You can get two free credit scores, updated monthly, on, and if your scores aren’t where you’d like them to be, you can make a plan to improve them.

[Offer: Your credit score may be low due to credit errors. If that’s the case, you can tackle your credit reports to improve your credit score with help from Lexington Law.  Learn more about them here or call them at (844) 346-3296 for a free consultation.]

More Money-Saving Reads:

Image: OJO_Images

The post Can Asking for a Higher Credit Card Limit Increase My APR? appeared first on

Help! My Credit Card APR Just Went Up

credit card APR

Credit card issuers have to let you know at least 45 days in advance that your annual percentage rate (APR) is going to rise, thanks to a law change in 2009. But the heads up doesn’t exactly take the sting out of knowing that your credit card balances are about to get more expensive, particularly if you’re already working hard to pay one down.

Fortunately, there are a few steps you can take to prevent the increase from completely busting your budget. Here’s what to do if your issuer lets you know your APR is climbing.

1. Find Out Why

There are lots of reasons why your APR may be on the rise. Anyone with a variable-rate credit card, for instance, will likely see their APR go up alongside a rate increase made by the Federal Reserve, since the two are tied directly together. Alternately, a rate increase could be related to your personal spending habits — issuers periodically review their cardholders’ credit and may change the terms and conditions associated with an account if they see a dramatic drop in a cardholder’s credit score. (You can keep an eye on your credit scores for free every month on to track where you stand.) If you’re unclear as to why you’ve received a notice about your APR, call your issuer for clarification. Once you know what’s driving their decision, you can take the right steps to address it.

2. Check Your Credit

If your rate increase is tied to your credit score, you’ll want to understand what derogatory information may be holding it down. Conversely, if you’re weathering a rate hike through no fault of your own, it may be time to shop around for a new credit card (more on that below) — and you’ll want to be sure your credit score is in good shape so you can qualify for the very best offers — and, specifically, a lower rate than the one you currently have. You can get your free credit reports by visiting

3. Take Steps to Improve Your Score

You can maintain a good credit score by making all payments on time, keeping debt levels below at least 30% and ideally 10% of your available credit and adding a mix of credit accounts organically over time. You can fix your credit by pinpointing your credit score killers, starting a positive payment history and cleaning up your credit report. (You can also use this guide to learn how to dispute errors with the three major credit reporting agencies.)

4. Comparison Shop

Once you’re confident in your credit score, you can shop around for a new credit card. Look into a low-interest credit card or a balance transfer credit card, which lets you transfer an existing high-interest debt to a new card with little-to-no interest for a period of time (typically 12 to 18 months). You can read our recent ranking of the best balance transfer credit cards in America here to help you pick the best offer.

Keep in mind, too, any offer you receive could be used as leverage to get your current issuer to reconsider your APR hike. Just be sure not to apply for too much new plastic all at once. Each credit card application generates a hard inquiry on your credit report, which could subsequently ding your credit score.

5. Address High Balances

If you can’t qualify for a new credit card and your issuer is sticking to their rate hike, you will want to pay down any balance you are carrying on that credit card as soon as possible to minimize the cost of that debt.

Under the 2009 CARD Act, the notice of an APR change must give you the opportunity to close the account. And, if you decide to do so, the issuer can’t charge a penalty fee, place you in default just because you close your account while you still owe a balance, or require you to pay your balance in full immediately. Your card issuer can, however, require you to pay back your balance over five years, or double your previous minimum monthly payment. Keep in mind, closing a credit card could hurt your credit score.

You can attack credit card debt generally by looking into debt consolidation loans, signing up for a debt management plan and redrafting your budget to see if there are any additional dollars you could put toward your balances each month.

More on Credit Cards:

Image: Creatas

The post Help! My Credit Card APR Just Went Up appeared first on