How to Increase Your American Express Credit Limit
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American Express isn't like its two big payment rivals, Visa and Mastercard. AmEx is both the brand stamped on its cards, and -- for its more well-known products, anyway -- the issuer of the credit. Visa and Mastercard are brands and payment networks only; your bank or other financial institution is the entity that actually extends the credit.
This means that the company determining whether you can increase the limit on your American Express card is almost always… American Express (almost always, because the company does have branded cards offered by outside issuers).
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Which makes it relatively easy to nail down the methods and strategies for requesting a limit increase on an AmEx-issued American Express credit card. Happily, AmEx credit cards tend to be aimed at relatively well-off customers, so the issuer is often quite accommodating with limit hike requests.
What is a credit limit, anyway?
A card's credit limit is exactly what it says on the label -- it's the highest amount of money an issuer will allow you to spend. So if your card has a $5,000 limit, you hit the wall at that figure (and usually, if not covered by optional over-limit protection, will have transactions declined when crossing that threshold).
Having said that, American Express has its own rules for credit limit breaching. The company says it may grant temporary approval to exceed the limit, and won't ding you a fee for doing so. This will, however, increase the minimum payment due for the relevant statement period.
What is a typical credit limit?
In the broader credit card world there is no "typical" limit. It varies widely by issuer; some cards aimed at first-time credit card holders will extend only $1,500 or $2,000 at most, while higher-end products (like quite a few in the American Express lineup) reach into the five- and even six-figure range.
Some even have virtually no boundary at all; in fact, American Express is known for this -- the issuer's famous Centurion (or "black") card, for example, has no pre-set spending limit.
A credit limit also depends on the cardholder's financial profile. If he or she has proven to be a prudent, careful manager of credit -- specifically, if (s)he has low credit utilization and generally pays card statements on time -- the issuer would generally set the figure relatively high. For those who have struggled with same, most likely a lower limit would be imposed.
American Express's rules for requesting a credit limit increase
American Express has a few rules governing when a cardholder may formally request a credit limit increase. The company requires that:
- The request be made at least 60 days after the card account is opened, unless
- You wait for at least 90 days between credit limit increase requests
- You wait a minimum of six months to apply for a fresh credit limit boost for any of your American Express credit cards
American Express often responds immediately to a request; in certain cases it may take up to 10 days or so to render a decision.
Decision factors important to American Express
In deciding whether to grant a credit limit request, American Express is fairly traditional -- at least according to its official statements on the matter. Judging by these, the company particularly likes to see:
- Debt when matched against overall income. A successful applicant won't have debt that's too high relative to total income. AmEx doesn't specify its goal, but an accepted rule of thumb is that debt should be no more than around 35% of your income.
An applicant's income sources can include:
- Salary, and/or
- Freelancing pay
- Coupon payments from bonds
- Dividend payments from stocks
- Rent from owned real estate that is being leased to outside parties
- Spending habits. AmEx qualifies this item with the phrase "if known." In that case, the company will match this data against your income to help determine if it would be risk-appropriate to boost your limit.
- Credit reports and scores. The all-important credit scores are bestowed by specialist credit bureaus (Equifax, Experian, and Transunion are the most prominent). These, plus reports from these bureaus, provide an indication of how good a borrower you are.
- Payment history with American Express specifically (if applicable). Do you generally settle your AmEx bills on time? If not, that might be a dealbreaker for a limit increase request.
How to avoid a credit limit decrease
American Express credit limit changes don't only go in one direction. The issuer reserves the right to lower the ceiling too. It strongly implies that there are two situations in which it'll seriously consider doing so:
- If a customer falls behind on his or her payments.
- When a card member starts to consistently exceed their credit limit.
Both American Express and its clientele have a mutual interest in maintaining, and eventually raising, credit limits.
In order to avoid the aforementioned bad habits, AmEx has the following suggestions. Broadly speaking, these mirror the general advice proffered by credit card experts, which includes tips such as:
- Monitor your credit on a constant basis; these days there are many free tools with which to do so.
- Trim unnecessary expenses.
- Discipline yourself not to be tempted by impulse buys.
- Set up automatic payments that disburse far enough in advance to take care of at least the minimum payment by each statement deadline.
How to apply for an American Express credit increase
It's not hard at all to request a limit increase on an American Express credit card. A card member can do it the old-fashioned, speak-to-the-company way by phoning AmEx customer service at 1-800-528-4800. You'll tell the nice robo-assistant voice that you would like a credit limit increase.
You will be guided from there. Just make sure to have your current financial (total income, housing expenses, etc.) and biographical information handy for this.
Of course you can also request a credit limit increase online. Just log in to the relevant AmEx card account (if you have more than one), navigate to "Account Services," then "Credit Management," and finally click on "Increase Line of Credit."
The system will take you through the process. Again, have your current financial and biographical particulars at the ready while you do so.
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