Wednesday, January 2, 2008

Increasing Your Credit Line by Doing Nothing at All!

How do you increase your line of credit with an existing card?  The obvious solution is to simply ask the bank to extend the credit limit.  And that works, as long as your payment history is good, have a good FICO score, etc.

However, another way of getting more credit is to just do nothing.  On Dec 31st, for example, I got the word from Bank of America that they were increasing my credit limit to $23,500 from $20,000 on a platinum MasterCard that I've had with them since 1988.

The back story is that I've not been happy with BofA for a while now.  They have been slowly jacking up my rates, even though I've been a long-term customer.  (Although not a "good" customer, as I pay my bill in full every month.)  So I stopped using the card back in September and switched over to an Advanta credit card, which had a much better rate, should I ever need to revolve a balance.

Turns out that BofA quickly noticed I wasn't using their product and they weren't even collecting interchange on me.  So they thought that by increasing my credit limit and sending me a bunch of checks (with a 1.9% balance transfer rate--whew, what a lousy offer!) that I'd mend my ways and come back to Bank of America.  Well, I probably won't go back to using their MasterCard, but I do appreciate the larger line of credit.  You never know when you might need some short-term credit to tide you over.


CardShark said...

I've noticed that whenever I have transferred a balance in the past, this has triggered a bunch of checks being sent with a 0% rate (and some term) from the card that just got cleaned - with a pleading letter to use them in the same way. Sometimes they up the limit too - but if I call them (after doing that) they almost always up the limit without me saying anything at all - and if I ask for a rate reduction, they usually up the limit as well...

gridmaster said...

Yep, the checks and limit increases are usually triggered by a "cancel propensity" model. By taking some action that looks like you're either going to cancel the card or move it from top-of-wallet down, the card company CRM systems start triggering actions to get you to come back to them.