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Higher Credit Limits
Once a customer has reached the established credit limit, the credit manager has a decision to make about whether to continue to support the growth in sales with a larger credit limit. It is always easier to say “yes” to such a request than it is to say “no.” However, certain accounts simply do not qualify for a larger line of credit - specifically customers that need a larger credit limit because they do not pay their bills. The accounts are not good candidates for a credit limit increase.
Rather than simply declining the increase, an experienced credit professional can use the request for a larger credit limit to bring to the customer’s attention their payment pattern. Customers should be told that, if they paid more promptly, there would be no need for a larger credit line.
© 2011 by Michael C. Dennis. All Rights Reserved. Please visit his website at www.coveringcredit.com