Increasing your line of credit enables you to obtain more credit and thus be able to make larger purchases. Requesting to increase your credit with Bank of America can be as easy as making a phone call or filling out an application online. You will also need to gather some documents related to your income and credit scores. It’s a good idea, though, to weigh the pros and cons of increasing your credit before you apply.
In 2011, the Dallas Mavericks surprised the world by winning the NBA finals over the heavily favored Miami Heat. After the final closeout game in which the Mavericks sealed the deal, Marc Cuban, billionaire and owner of the Dallas Mavericks, took everyone to celebrate at LIV nightclub in Miami. When the bill of over $200,000 came due, Cuban’s credit card failed to work. Why? He did not officially authorize the credit card and thus had a $0 credit limit.
He eventually rectified the problem. But the same thing happens every day to people who aren’t the billionaire owners of professional sports teams. They go to make a purchase and realize that they are over their card’s credit limit. For the many people who use Bank of America, a higher credit limit is something worth considering.
In most cases, a Bank of America credit limit increase is relatively easy to request — you can apply online and over the phone. They will look at factors like your past credit history, your Bank of America responsible credit use, the length of time you’ve had a Bank of America account, and your current income. Even though it might be tempting to increase your credit right away, it should come with careful planning. Although a higher limit might lead to more available credit and a higher credit score, it can also increase profligate spending and lead to an increased debt load.
What is a line of credit?
A line of credit gives you direct access to money you borrow from a financial institution. It’s similar to a loan, but instead of getting a lump sum upfront, you can borrow from the funds as needed. You can obtain a home equity line of credit, or HELOC, tied to your home. Or you can get a personal or business line of credit through a bank or credit card company. You will be charged a rate of interest on top of the money that you borrowed. Interest rates are typically lower than regular credit cards because the application process is a little more in-depth.
What is a credit limit?
A credit limit is the maximum dollar amount you can borrow through your line of credit, similar to the way a credit card works. If you have a credit card with a limit of $2,000, then you can borrow a maximum of $2,000. Unless you pay down part of the balance, you will be maxed out when you reach the $2,000 limit. You are not relegated to $2,000, however. As long as you have been responsible with your credit use, you can apply or ask to increase this to a higher amount. If you use Bank of America, you just need to follow the appropriate processes.
Who qualifies for a Bank of America credit increase?
Bank of America does not explicitly list what metrics it uses to consider an applicant viable for a credit line increase. However, based on competitors and precedent, they will probably look at the following items.
Credit history and score
The first items that Bank of America will look at are your past credit history, credit report, and credit score. If your credit score is solidly in the 700s, that’s a good start. However, your credit history can come into play even if your credit score is rock solid. If you have defaulted on loans or declared bankruptcy in the past, your risk profile will rise in the eyes of the bank. If you have bad debt on another credit card account, this will also count against you.
Credit use with BOA
Your credit use with Bank of America will obviously come into play. What does the usage of your existing credit look like? Do you pay your balance off on time every month? If you are constantly maxing out your existing line of credit, this can come into play as well. If your previous credit usage with BOA has been impeccable, that should work in your favor.
Any lender will look at your income to determine your risk profile. Bank of America will look at your income compared to where it was, say, a year or two ago. If your income has increased, then you will be able to comfortably shoulder a higher debt burden. If your income hasn’t increased and you have trouble paying off your existing credit card bills, then this can be a red flag.
How to increase your BOA credit line?
If you are thinking about increasing your credit limit with BOA, here are some tasks you should check off before you jump in.
Step 1: Gather documents related to your credit
Obviously, Bank of America will have all the information regarding your existing credit line with BOA. However, you might want to check and gather documents based on the considerations listed above. Make sure you gather the documents related to your credit score with the three major credit bureaus. If they differ significantly, make sure you know why. Furthermore, if you have a new employment contract that includes an increased salary and a different bonus structure, you should be able to provide it if asked.
Step 2: Decide how much credit you want
Before you request a credit limit increase, you should verify the dollar amount of your current credit limit. If you don’t know off the top of your head, you can usually find this on your monthly Bank of America credit card statements. You then need to decide how much credit you want to add. Make sure you know your spending habits and don’t ask for too drastic credit limit increases. If your existing credit limit is $2,000, it’s safer to ask for it to be increased incrementally, say first to $5,000. If you request a huge increase of $20,000, for instance, you are likely to get rejected.
Looking to get more credit with a different card? Here are some alternative credit card options.
Step 3: Apply for a credit increase
Once you have completed the first two steps, now is the time to apply. Luckily, Bank of America has streamlined the process to make credit limit increase requests relatively easy. There are two options to do this: apply online or apply over the phone.
This day and age, if you use Bank of America, you also use their online portal. When you log in to your account, there should be an option in the form of a button or link that reads, “Request a Line of Credit Increase.” This is usually found in the “Card Details” portion of the account summary under “Services and Information.” You then fill in the requisite details on the online forms and wait for a reply.
Apply over the phone
Find your existing BOA card and flip it over. The phone number on the back of your card is a direct line to increasing your credit limit. Call the number and select the options that take you to the customer representative dealing with the credit line space. They will ask you some questions, including why you would like your credit limit increased.
What if Bank of America rejects my request?
Reapply for the increase
If you got rejected, for whatever reason, you can apply again. However, wait six months before you fill out an application. This will give you time to review why exactly you might have gotten rejected. If you requested too drastic of a limit increase, you might want to tone it down a bit on your next application.
Try to increase your credit line on a different card
Most people will have multiple credit cards from various credit card issuers. If you can’t get the limit on your Bank of America line of credit increased, then try with another credit card issuer. If the problem persists, you might have some serious credit issues. Go back to the first step and double-check your credit history. There must be a reason why you continue to suffer rejection at the hands of credit issuers.
Benefits and drawbacks to increasing your credit limit
Before you try to increase your line of credit, ask yourself, “Is this an absolute positive?”
Here is a list of the benefits and drawbacks to consider when increasing your BOA credit limit.
- More credit is available.
- Lower credit utilization ratio.
- Higher credit score.
- Potentially more debt.
- Risk of overspending.
More credit available
If you make large purchases once in a while, like a new TV or new kitchen countertops, having more credit available is important. In the case of a business line of credit, you may need the additional credit to grow the business or purchase inventory.
Lower credit utilization ratio
Your credit utilization ratio is the amount of credit that is available to you versus how much of it you actually use. If your credit limit increases but you use more or less the same amount of credit, your utilization ratio will decline. This is generally seen as responsible credit use.
Higher credit score
The more credit you use and pay down, and the more responsible you are with it, the higher your credit score can be. This is really important when you are looking to take out auto and home loans. The better your credit is, the better terms you can muster when you borrow.
The more money you can borrow, the more debt you can potentially take on. Many of us will just spend, not planning on how exactly we will pay it back. The more debt you have, the more of a financial burden you will bear. Make sure to be smart with your credit usage.
This is really about the type of person/consumer you are. If you spend all the credit or money available to you instantly, it’s probably not a good idea to just take out more. If you know how to use credit responsibly, however, this shouldn’t be an issue. Only take out an amount that you can reasonably pay back.
Does Bank of America automatically increase your credit limit?
Yes, Bank of America will sometimes increase your credit limit automatically. This is why it’s important to check your existing credit limit before you apply for an increase.
How often does Bank of America increase a credit line?
Bank of America typically issues credit card line increases once every six months.
Does requesting a Bank of America credit line increase cause a hard inquiry?
Yes, many lenders will do a hard inquiry when approving you for a credit line increase. However, it shouldn’t have a major impact on your credit score unless you apply for increases multiple times.
What is the maximum credit line for Bank of America?
The maximum credit line for Bank of America is $95,000.
- Increasing your credit limit on your credit line can enable you to spend more and make large purchases.
- Bank of America will consider factors like your credit history, your existing credit use through BOA, and your current income before they approve you.
- You can increase your BOA credit line over the phone or online. Make sure you check your credit history and current credit limit before you apply.
- Taking on more credit can have advantages for your credit score and credit utilization ratio. However, make sure you can take on more credit responsibly.