Why was my Credit Limit Increase Denied?
"I think they gave you the answer: You haven't previously shown that you can run that particular card up to (near) its existing maximum and then pay it off, so they don't have a strong indication that you can handle that large an unsecured loan. Generally, requests to have the limits raised when there isn't evidence that the customer is finding the current limit inconvenient are going to be considered suspicious. Remember, a great credit rating does not require that they consider you a good risk -- it's just one of the things they consider. Why do you need the limit raised? Have you tried contacting the bank's credit department directly and discussing what they will or won't let you do? Re paying off the card every month: Remember, they do get a processing fee from the vendor. They'd prefer that we paid interest (I'm told the term of art for those of us who don't is ""deadbeats""), but they certainly don't lose money when we don't. And they'd generally rather have us be loyal customers who MIGHT someday pay interest, and who are bringing in fees, than have us go elsewhere." "The bottom line is that you are kind of a terrible customer for them.   Granted you are far better than one that does not pay his bills, but you are (probably) in the tier right above that. Rewards cards are used to lure the unorganized into out of control interest rates and late payments.  These people are Capital One's, and others, best customers.  They have traded hundreds of dollars in interest payments for a couple of dollars in rewards.  The CC company says:  ""YUMMY""! You, on the other hand, cut into their ""meager"" profits from fees collected from your transactions.  Why should they help you make more money?  Why should they further cut into your profits? Response to comment: Given your comment I think the bottom line is a matter of perspective.  You seem like a logical, altruistic type person who probably seeks a win-win situation in business dealings.  This differs from CC companies they operate to seek one thing:  enslavement. BTW the ""terrible customer"" remark should be taken as a compliment.   After you get past the marketing lies you begin to see what reward programs and zero percent financing is all about.  How do most people end up with 21%+ interest rates?  They started with a zero percent balance loan, and was late for a payment. Reward cards work a bit differently.  Studies show that people tend to spend about 17% more when they use a reward card.  I've caught myself ordering an extra appetizer or beer and have subsequently stopped using a reward card for things I can make a decision at the time of purchase.  For people with tight budgets this leads to debt. My ""meager"" profits paragraph makes sense when you understand the onerous nature of CC companies.  They are not interested in earning 2% on purchases (charge 3% and give back 1%) for basically free money.  You rightly see this as what should be a win-win for all parties involved.  Thus the meager in quotation marks.  CC companies are willing to give back 1% and charge 3% if you then pay 15% or more on your balance. Some may disagree with me on the extracting nature of CC companies, but they are wrong.  I like him as an actor, but I don't believe Samuel Jackson's lines."
Is my understanding okay ? If so, it seems to me that this system is   rather error prone. By that I mean I could easily forget to make a   wire some day and be charged interests while I actually have more than   enough money on the check account to pay the debt. Which is where the credit card company can add fees so you pay more and they make more money. Don't forget that in the credit case, you are borrowing money rather than using your own. Another thing that bothers me is that the credit card apparently has a   rather low credit limit. If I wanted to buy something that costs $2500   but only have a credit limit of $1500, can I make a preemptive wire   from my check account to the VISA account to avoid facing the limit ?   If so, what is the point for the customer of having two accounts (and   two cards for that matter...) ? If you were the credit card company, do you believe people should be given large limits first? There are prepaid credit cards where you could put a dollar amount on and it would reject if the balance gets low enough. Iridium Prepaid MasterCard would be an example here that I received one last year as I was involved in the floods in my area and needed access to government assistance which was given this way. Part of the point of building up a credit history is that this is part of how one can get the credit limits increased on cards so that one can have a higher limit after demonstrating that they will pay it back and otherwise the system could be abused. There may be a risk that if you prepay onto a credit card and then want to take back the money that there may be fees involved in the transaction. Generally, with credit cards the company makes money on the fees involved for transactions which may come from merchants or yourself as a cash advance on a credit card will be charged interest right away while if you buy merchandise in a store there may not be the interest charged right away. There is one massive catch in this which I found out when I went to Nationwide to ask for a loan. I've got a credit card which they kept increasing my credit limit, it's now at something ridiculous - nearly £10,000 but they keep increasing it. I never use that card, when I went to Nationwide though they said they couldn't give me a loan because I had £10,000 credit already and if I reduced this credit this would affect my credit rating and they could potentially give me a loan. I then realised what MBNA had craftily done.  I have two cards with this bank, one with really low interest and the other with really high interest (and a high credit limit) - even though the other card has a zero balance loan companies still see it as money I could potentially go and spend, it doesn't matter to them that I've not spent any money on that card in about 12 months, to them it's the fact that they could give me a loan and then I could go and spend another £10,000 on that card (as you can see extremely risky).   Of course this means that what MBNA are craftily doing is giving me such a high credit, knowing full well that I'm not going to use it, but it also prevents their competitors from offering me a loan, even at a lower rate, because I've already got too much credit available. So yes there is a catch to giving you a high credit limit on your cards and it's to prevent you from either leaving that bank or getting a lower interest rate loan out to clear the debt. "With regards to ""the stock market,"" there are actually two markets involved here: PRIMARY MARKET Value is created in the primary market where capital is exchanged for a residual interest in an opportunity.  As a theoretical example, if a person operating solo (or with a small team) were to discover or create a breakthrough product, such as an retro-aging pill, that person likely wouldn't have the financial means to fully capitalize on his new-found idea.  Others with more capital may also soon discover his idea or improve upon it and exploit it before he has a chance to. For a real life example, a person studying at a California university during the 1990s discovered a method to index internet webpages and was approached by some students after a talk on the subject.  He returned to his native southern Europe country seeking funds to develop the web-indexing business and failed to do so.  Two of the students that approached him found capital readily available from investors in their campus sphere; their business is today one of the biggest in the world.  They had exchanged part of their residual interest for capital to develop their business. The primary market of the stock market works mostly same in creating value.  It is also dependent upon the secondary market. SECONDARY MARKET The secondary market indicates the day-to-day value of an enterprise.  That market allows shareholders to manage their risk appetites and the enterprise's operators to execute their shareholders' interest for gains.  In most cases, a secondary market reference will be used for pricing a primary market issuance.  Without that reference, capital would be allocated less efficiently creating additional costs for all involved, issuers and investors. Consider what would happen if you sought to purchase a house and the mortgage lenders had no indication what the property was worth.  This would make capital very expensive or possibly deny you access to credit.  By having an indication, all involved are better off.  That is value creating. There are some large developed economies' equity markets, such as that in Germany, where many large enterprises stay privately held and credit financing, mostly from banks, is used.  The approach has proven successful as well. So why do some nations' financial markets still rely on capricious stock markets when private credit financing may do just fine in many cases?  It's largely a matter of national culture.  Countries such as the Netherlands, the UK and the US have long had active equity markets in continuous use that investors have trusted for centuries. CONCLUSION When leaders of an enterprise wish to grow the business to a large size with investment from the stock market, they aren't limited by the size of their banks' capital.  Those leaders and their prospective investors will rely on the secondary market to determine values.  In addition, if the leaders raise equity instead of debt capital, they are usually accorded more flexibility to take risks since shareholders usually have their own flexibility to transfer those risks to other investors if for any number of reasons they choose to do so. Stock markets create value in many other ways.  The above are the main ways." The card you have is one where you had to deposit an amount equivelent to your card limit -a secured limit credit card.  Capital One is one if the primary cards of this type. The typical rules of credit card usage and building your credit, do not apply.  So, yes, you want to use the card as much as possible and pay off your balance as often as is necessary to keep your limit freed up. You can actually pay the full balance plus 10%, and gain a little extra limit. Use your card as much as possible and call them and ask for a limit increase every three months.  usually about 4 - 5 months in, they will increase your limit and do so without asking for a corresponding security deposit.  This is really cool, because it means you are becoming credit-worthy. I know so much about this because I applied for this card for my son and am helping him in his attempt to repair his credit.  His score increased by almost 200 points last year. This shows the impact of the inquiries. It's from Credit Karma, and reflects my inquiries over the past two years. In my case, I refinanced 2 properties and the hit is after this fact, so my score at 766 is lower than when approved. You can go to Credit Karma and see how your score was impacted. If in fact the first inquiry did this, you have cause for action. In court, you get more attention by having sufficient specific data to support your claim, including your exact damages. "I don't know of a guideline to how often you can ask for an increase. You can ask as often as you like. As for consequences, refer to Is there a downside to asking for a credit increase?, where the consensus is that, aside from a possible (temporary) hard pull on your credit report, there's probably no risk to asking. Depending on your credit score/history, and especially in the current economy, you may get ""no"" as an answer most often. You can try talking to your card's Credit Department or even Customer Retention Department as they may have more leverage. They may say yes or no or that they need to review your account. When you do ask for an increase, I would make sure to ask if there will be a hard pull on your report, if there is any cost or downside to applying, and to make sure that this would be an increase to your current credit line, not a new account." Believe it or not, this is done as a service to you. The reason for this has to do with a fundamental difference between a credit card account and a checking account.  With a credit card account, there is no money in the account; every charge is borrowed money. When you get to your credit limit, your credit transactions will start getting declined, but if the bank does for some reason let one get approved, it's not a big deal for anyone; it just means that you owe a little more than your credit limit. Note that (almost) every credit card transaction today is an electronic transaction.  A checking account, however, has real money in it. When it is gone, it is gone. When a balance inquiry is done, the bank has no way of knowing how many checks you've written that have not been cashed yet. It is a customer's responsibility to know exactly how much money is available to spend.  If you write more checks than you have money for in your account, technically you have committed a crime. Unfortunately, there are too many people now that are not taking the responsibility of calculating their own checking account balance seriously, and bad checks are written all the time. When a bank allows these transactions to be paid even though you don't have enough money in your account, they are preventing a crime from being committed by you. The fee is a finance charge for loaning you the money, but it is also there to encourage you not to spend more than you have.  Even if you use a debit card, it is still tied to a checking account, and the bank doesn't know if you have written enough checks to overdraw your account or not. It is still your responsibility to keep track of your own available balance.  Every time this happens to you, thank the bank as you pay this fee, and then commit to keeping your own running balance and always knowing how much you have left in your account. No, they cannot refuse to provide you with the current balance or a balance history. The other answers point you to resources that are available to help you put pressure on the dealership. The bottom line is that you now know that you have the right to the details and to audit their recording of the transactions. You should now use that information and demand a better response in writing. If they have to give you a response in writing, they can't deny the answer they gave in a court of law later on. They understand this, and they will take you more seriously if you send a letter. Make sure to keep copies of the letter and send it with certified delivery.