5 Ways to Get a Higher Credit-Card Limit This Holiday Season Increase your card limit and snag all of the gifts on your list.

This will come as no surprise, but the 2021 holiday season is quickly approaching, and consumers are ramping up to celebrate Christmas and the New Year. Along with these joyful holidays comes, unfortunately, the high cost of spending to purchase gifts, food and other necessities.

While many people try to stick to a budget, the price of goods has increased dramatically in the United States, leaving many individuals wondering how they can get approved for a higher credit-card limit — and fast.

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Well, you're in luck. Here are five surefire ways to boost your credit limit this holiday season.

1. Active credit

Banks like to see that you have at least four accounts on your credit profile. In fact, contrary to popular belief, the more the better. Revolving accounts (like credit cards) should have a minimum of six months of payment history with a utilization under 15%. Be careful, however, not to completely zero out all of your revolving accounts. Banks like to see that you are utilizing credit, but not too much — about 30% is optimal. It's a subtle art. Installment accounts should also have a minimum of six months of payment history as well as a low balance — the lower the better.

2. Clean credit

Do not have any negative or derogatory items on your credit report at all. This includes collections, charge offs and missed payments. Anything negative will stop you from getting a higher credit-card limit, even if the blemish happened long ago. However, remember that most derogatory items fall off your credit report in seven years, so there is hope if you've made mistakes in the past.

3. Tradeline

Add one — and only one — large authorized-user tradeline. An authorized-user tradeline is most commonly used when a friend or family member adds you to his or her credit card. Then, the user's credit history (age of that account and credit limit) will show up on your credit profile in less than 30 days. If the person hesitates to add you, let him or her know that you don't actually need to use the card at all; it just needs to show up on your report.

Ideally, you want an older credit card with a high credit limit. A credit card from Capital One with one year of history and a $500 limit is considered a small authorized-user tradeline. A credit card from Chase with nine years of history and an $18,000 limit is considered a large authorized-user tradeline. In this case too, the bigger the better. Only add one of these because if you add multiple, the banks will think you are trying to take advantage of the credit system.

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One big tradeline will enhance your file, and most banks will even mirror your highest limits — a huge bonus.

4. Minimize inquiries

The best time to apply for a credit-limit increase is when you don't have a lot of hard inquiries on your credit profile. Hard inquiries stay on your credit profile for up to 25 months and, typically, you want to ensure you have no more than three inquiries per bureau. Oftentimes, when lenders check your credit, they run your credit multiple times in a practice now known as "a shotgun inquiry."

When lenders pull your credit in this method, it harms your credit profile but, according to the Fair Credit Reporting Act, it also has legal ramifications. Most credit-repair companies can dispute the accuracy of these multiple inquiries and delete them from your report — sometimes in as little as 24 hours. When you apply for a credit card, you must not have a lot of these hard inquiries.

5. Be cautious

The most important tip of all is to read the fine print. Credit-card issuers want to know how much of a credit limit they can give you. To determine this, they look at the amounts of credit cards already on your credit report, the amounts of installment accounts, your annual income and rent. When they ask your annual income, the fine print sometimes says "household income" or "projected income." You can either include you and your spouse's income, your roommate's income or the amount of money you think you will be making this upcoming year.

All banks have their own algorithms that they use to determine credit worthiness. If you are applying at an institution that you bank with, some will take that into account, as well as how much money is in your checking or savings account.

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Even though the holiday season is almost here, it's not too late to start making changes to secure a higher credit-card limit. Follow the above tips, and you'll be well on your way to getting the finances you need to enjoy a comfortable Christmas and New Year's with your family and friends.