Raise My Credit Limit Please
One of the purposes of a student credit card is to allow a company to credit you a loan for a certain period of time. Along with this student credit card comes a credit limit. How is the student credit card limit determined? Let me explain with the below information.
The first thing you will need to do is find the student credit card that you most want to apply for. From there, you will need to be accepted from the credit card company itself. This will probably be the toughest part out of all the steps. Previous credit, debt to income ratio, and other factors will determine if you will be approved or not.
Once you have been approved by the student credit card program, the company then must determine how much money they are going give you as credit. This is called the student credit card limit. This number can be raised or even lowered over time depending on how you use your student credit card. If you intend to pay your bill in full every time, it is most likely you will receive a fairly nice increase. If you do not do this, your student credit card limit may drop and your APR may increase.
Let us look at what student credit card companies look at when they are determining your credit card limit.
Your monthly income: This may be the biggest issue. They want to see exactly how much money you make to see what limit will be right for you. They will not want to give you a $3,000 limit if you only make $300 a month.
Your current debts: These debts will usually include car loans, college student loans, mortgages, and any other credit card bills. The more debt you might have, the more hesitant the companies might be in giving you more of a limit. However, the less debt you have, the higher your student credit card limit may be.
Length of residency: This may not seem like a big deal, but companies want to make sure you are not moving from one place to another every couple of months. This will raise red flags because you most likely are either being evicted or you cannot afford to pay your current rent payment. Now of course, you might move due to job requirements, etc but companies really want you to stay at your residence for more than a year.
Other credit cards you own: The more student credit cards you own, the less likely you will be approved for a higher limit. That is because you have access to all of this credit and not much will stop you from building it up and filing for bankruptcy. Banks can be very careful when it comes to how many credit cards you may own.
The above four points are probably the some of the most important factors when it comes down to determining your student credit card limit. The more money you make, the higher your credit limit will be, and it really is that simple. To make sure you receive the highest limit possible, you will have to have a nice income, no debt, and a decent length of time at your current residence, and a very limited amount of credit cards.
Student credit cards.com @ June 12, 2008