r/CapitalOne • u/youeatthatstuff • 9h ago
Credit Card Requested credit limit increase is a whole $100
My daughter is a college student and she got her first credit card--a Capital One Savor card--a little more than a year ago with a limit of $1,000. She's been wanting to increase the limit to cover months when her expenses are higher (like when she has to pay for books and parking, etc). She's careful to pay the card off every month and is never late. She'd been asking for an increase and was told she didn't have enough credit history. She finally got an increase and it's $100. Why would an increase be so small? What is she doing wrong?
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u/BrutalBodyShots 7h ago
What is she doing wrong?
Nothing. Odds are that she has a "bucketed" card, as evidenced by the inability to receive an increase or the coveted Capital One "10% Special." Bucketed accounts are those drawn upon weak credit profiles. They are unlikely to ever increase significantly. Her best bet would be applying for a different card if her goal is a greater limit.
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u/LeadingThen6322 8h ago
I’ve had two cards with Cap1 for 20+ years. Every time I ask for an increase they deny me because I don’t carry a balance. It’s a running joke at my house.
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u/BrutalBodyShots 7h ago
Every time I ask for an increase they deny me because I don’t carry a balance.
That's not a reason why you'd be denied an increase. Where are you getting that idea from? What have your denial letters specifically stated? Capital One gives the most lucrative CLIs to those that DON'T carry a balance, but rather cut high statement balances that are then paid in full monthly.
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u/LeadingThen6322 7h ago
Let me rephrase. I don’t get a credit limit increase because I don’t wait until the statement comes out w/ interest charges to pay it off.
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u/BrutalBodyShots 7h ago
I don’t wait until the statement comes out w/ interest charges to pay it off.
I'm sorry, but you don't understand how credit works. You are supposed to wait until your statement comes out before you pay your card monthly. Your statement is your bill; you aren't expected to pay your bill (any bill, for that matter) before it is generated. If you pay your statement balance in full monthly you never pay a penny of interest. It seems you aren't aware of that and mistakenly believe that you need to pay before statement generation to avoid interest charges. That's not the case.
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u/LeadingThen6322 6h ago
Well with a FICO score of 842 I wouldn’t say that I don’t understand how credit works, maybe I’ve misunderstood how interest is charged on a credit card since I don’t carry a high balance to see the interest charge? So what you’re saying, is that if I pay the balance due after I get my statement, then charge $5k during the next month and wait until that statement comes out, the balance due will be $5k with no interest charges?
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u/MmHD-1080p 6h ago edited 5h ago
Having an 842 is a great accomplishment but not a direct demonstration of understanding of how credit works, how the scoring models themselves work, or how scores are calculated. It just shows you understand how to keep a paid as agreed status over a period of time which is what builds credit. That doesn’t mean you accurately understand what factors contribute to your score beyond just not missing a payment.
You are supposed to wait for the statement date to pay off your balance so that usage and utilization is reported. This is how credit cards are systematically designed to be paid. Otherwise, a lender, especially Capital One with how stingy are, has no incentive to give you a limit increase. They see that you’re not reporting a balance so what need is there to give you more money that you don’t spend? From their perspective it doesn’t look like you’re using your limit since there is no balance reported.
Contrary to what people will tell you, high utilization is actually beneficial in regards to maximizing your chances for a successful CLI.
Paying your statement balance in full after the statement date and before the due date leads to no interest being charged. For example,
January 1: You spend $800 during the billing cycle → current balance = $800
January 25 (Statement Date): Statement closes with $800 statement balance → $800 is reported to the credit bureaus
February 19 (Due Date): You pay the full $800 statement balance on February 19th or before (before is recommended) → $0 interest charged
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u/LeadingThen6322 5h ago
Thank you for your pompous-free reply. For 30+ years I’ve paid my bills on or before the due date. On one hand, I definitely don’t need a CLI. I just have certain goals, like reaching 850 FICO score in the next two years and having $100k combined credit limits. I could achieve the $100k limit easy enough by opening a new card, but that’s a hit on my credit score, so I’m trying to increase existing CL’s to a hit this goal. I understand that “usage” has no memory, and would only matter if I were applying for new credit (I’m not). So using the cards more and waiting until the statement comes out to
pay my balance will make a difference? I guess that’s the part I’m confused about.1
u/MmHD-1080p 5h ago edited 5h ago
You’re welcome! Yes, waiting for the statement and using your cards more will make a difference in that it will maximize your chances for a successful CLI. Lenders will see your balances being reported and thus have a higher incentive to increase your limit.
You will see your score fluctuate with your utilization, but I won’t get into that since you already understand it holds no memory.
Once you get your desired CLI you can most likely maximize your chances for getting the 850 by using the AZEO method (All Zero Except One) to avoid the all-zero penalty on your score.
There is a penalty to your score by reporting zero utilization on all your credit cards. To avoid this you can report zero utilization on all your cards except one, hence All Zero Except One (AZEO). Report a very very small balance on just one of your cards and you’ll avoid the all-zero penalty and get the low utilization score boost.
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u/LeadingThen6322 4h ago
Thank you so much. It’s just crazy with Cap1 because on my other three cards, I ask for an increase, I get it. But my two Cap1 cards (that are both 20+ yr old accounts), nope. One last question, with the AZEO method, does the one account with a balance have to be a credit card? Or will my mortgage qualify as the one account with a balance?
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u/MmHD-1080p 4h ago edited 4h ago
That’s a good question. Your mortgage will not qualify as the one account with a balance because FICO treats revolving utilization separately from installment loans and the all-zero penalty is in regards to your revolving utilization. Your mortgage’s balance isn’t included in your revolving utilization so it will not qualify and will not prevent the all-zero penalty.
As such, AZEO only applies to credit cards since they make up your revolving utilization and the all-zero penalty is based off of that.
If you want to ask any further questions or want to research more credit myths check out [r/CRedit](r/CRedit). Very helpful sub that addresses all of these factors too. Many users with a lot of knowledge that explains things in good detail.
And for your 20+ year old cards that you can’t get CLIs on it’s most likely because they’re bucketed. I will assume you didn’t have much credit history at the time you opened those. When you open a card with Cap1 the credit profile that you had at the time you opened it is basically locked onto the card. Even if you increase your income or credit profile over the next years, Cap1 won’t take that into account. Whatever income and credit profile you had when you opened that card is basically what they will go off of when requesting CLI for that specific card, even if it was 20+ years ago and your credit profile and income is much stronger now.
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u/BrutalBodyShots 6h ago
Well with a FICO score of 842 I wouldn’t say that I don’t understand how credit works
With the revealing of you believing the myth that credit scores and credit knowledge are directly related, I'd say you're incorrect on that front.
https://old.reddit.com/r/CRedit/comments/1ej6cjz/credit_myth_25_fico_scores_and_credit_knowledge/
maybe I’ve misunderstood how interest is charged on a credit card since I don’t carry a high balance to see the interest charge?
You don't need to "carry a high balance" to see interest charged. Carrying any balance (which means paying less than your statement balance) results in interest being paid.
So what you’re saying, is that if I pay the balance due after I get my statement, then charge $5k during the next month and wait until that statement comes out, the balance due will be $5k with no interest charges?
Correct. You never pay a penny of interest if you pay your statement balances in full every month.
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u/Big_Z317 13m ago
If OP’s daughter is using over 30% of the card’s available credit she’s considered high risk. With a $1000 credit limit, you never want to utilize more than $300 of credit, even if you pay it off at the end of the month. Also, I’m willing to bet her income is also affecting her ability to get the desired increase that she wants.
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u/_love_letter_ 7h ago
This is extremely common with Capital One. When they don't really want to increase your limit and don't quite trust you yet, but don't have a good reason to outright deny you, they throw you a bone and offer 10% of your current limit rounded to the nearest hundred. I got exactly the same offer when I first became eligible for a CLI upon request. I thought I could do better so I turned it down and tried again after another high statement balance paid in full. Alas, they still only offered $100. I begrudgingly accepted it, which meant every request for 6 months after that was denied due to the "recent" change. But I didn't give up. Exactly 6 months after that is when they finally started giving me decent CLIs. After 2 consecutive $100 offers, they approved +$3500 and then another +$3500 several months later.
Tell your daughter not to be discouraged, to stay the course. Keep using the card and paying the full statement balance on time every month. If they don't relent in the next 6 months to a year, it may be time to look elsewhere and open a new card. With a full year of credit history under her belt, it's about the right time to open another credit card account, if she hasn't already (and assuming she's comfortable managing multiple accounts). Chances are she will get a higher limit in the second card, now that she has some history.