When you get approved for a credit card, it comes with a credit limit. If you spend all the way up to that limit, you’ll need to pay off at least part of your balance before you can start using your card again.
Your credit limit plays an important role in both your spending flexibility and your credit score. A higher credit limit can make it easier to manage large purchases, improve your credit utilization and score, and provide a larger financial cushion during emergencies.
For these reasons, you may be eager to get a credit limit increase. Here, we’ll review how to do that, as well as how to ensure that a higher credit limit doesn’t end up hurting your finances instead of helping.
Key Takeaways
- A higher credit limit could improve your credit utilization and give you more financial flexibility.
- You can increase your credit limit by requesting one from your issuer, qualifying for automatic increases or opening a new credit card.
- Credit limit increases can become risky if they lead to overspending, higher debt balances and increased interest charges.
Benefits Of A Credit Limit Increase
Increasing your credit limit can offer several financial advantages, especially if you use credit cards responsibly.
Lower Credit Utilization
One of the biggest benefits of a higher credit limit is a lower credit-utilization rate. This figure measures how much of your available revolving credit you’re using and is a major factor in calculating your credit score.
For example, if you have a $2,000 balance on a credit card with a $4,000 limit, your utilization is 50%. If your credit limit increases to $8,000 and your balance stays the same, your utilization drops to 25%. The lower your utilization, the more helpful it can be to your credit score.
Greater Purchasing Flexibility
A higher credit limit could make it easier to handle large purchases or unexpected expenses without maxing out your card. This flexibility can be particularly useful for things like emergency home repairs or unexpected medical bills.
Improved Reward Opportunities
If you use a rewards credit card strategically, a higher limit may allow for larger purchases that generate additional cash back, travel points or other perks without driving your credit utilization up to a problematic level. Just make sure not to carry unmanageable debt or high levels of interest in the course of chasing rewards: It’s generally best to try to keep your credit utilization under 30%.
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How To Get A Credit Limit Increase
There are different steps you can take to increase your limit.
Request An Increase From Your Issuer
One of the simplest ways to increase your limit is to ask your credit card company directly. You may be able to make this request through your online account or mobile app. Or you can call customer service.
Your credit card issuer may ask for updated financial information to process the request, including your current income, employment status and current debts.
Wait For Automatic Credit Limit Increases
Some credit card issuers periodically review accounts and automatically raise credit limits for cardholders who demonstrate responsible behavior.
You may be more likely to receive an automatic credit limit increase if you:
- Make your payments on time every month
- Use your card regularly
- Maintain low balances relative to your credit limit
Open A New Credit Card
Another way to increase your total available credit is to apply for a new credit card. Not only might this give you more spending power, but it could help lower your credit utilization by giving you a higher total credit limit.
However, opening a new credit card will generally result in a hard inquiry on your credit report, which can temporarily lower your credit score.
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Soft Inquiries Vs. Hard Inquiries With a Credit Limit Increase
When you request a credit limit increase, the issuer may perform either a soft inquiry or a hard inquiry on your credit report.
Soft inquiries do not affect your credit score. They typically occur when companies review your credit for promotional offers, but generally not for a lending decision.
A hard inquiry occurs when a lender reviews your credit as part of a lending decision. Hard inquiries may lower your credit score by up to 5 points.
Some credit card issuers may use soft inquiries for credit limit increase requests, while others may require a hard inquiry. Before requesting an increase, you may want to ask whether the request will involve a hard inquiry.
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What Improves Your Chances Of A Credit Limit Increase
Credit card issuers evaluate several factors when deciding whether to approve a credit limit increase. The following could improve your chances of getting one.
Increased Income
If your income has risen since you opened the account, updating that information with your issuer is a smart move. Higher income levels can indicate greater ability to manage additional credit.
A Strong Payment History
When credit card issuers extend credit, they take on the risk of not getting repaid. If you consistently pay your credit card bills on time, it’s a sign that you’re someone who manages debt well and is therefore less of a credit risk. That could make an issuer feel more confident in giving you a higher limit.
Responsible Credit Utilization
Using your card regularly without maxing it out can demonstrate healthy credit habits. If you keep your credit utilization low, your credit card issuer may feel that raising your credit limit isn’t too risky for them.
Keeping Your Account Open For A Long Time
A long-standing credit card account demonstrates your loyalty. And if you have an older account in good standing, your credit card issuer may be more likely to approve an increase.
When To Ask For A Credit Limit Increase
Timing can play an important role in whether your request gets approved. You may want to ask for a credit limit increase:
- After a raise
- After your credit score improves
- After you’ve paid down a large chunk of your credit card balance
- After you’ve paid off another loan and have a lower debt-to-income ratio as a result
- Before a large planned purchase
On the flip side, you generally shouldn’t ask for a credit limit increase if you recently:
- Lost your job
- Got a lower-paying job
- Signed a new loan
- Racked up a large balance on your card
- Made a late payment
What To Do If Your Credit Limit Increase Request Is Denied
Just because you want an increase doesn’t guarantee your credit card issuer will say yes. A denied request can feel discouraging, but it doesn’t necessarily mean you won’t qualify in the future.
If your credit limit increase request is denied, here’s what to do.
Understand The Reason
Credit card issuers generally provide a reason for denial. Common explanations include:
- Insufficient income
- High debt levels
- Too many recent inquiries
- An unfavorable payment history, which commonly results in a lower credit score
Understanding the reason can help you figure out what to improve on before trying again.
Boost Your Credit Profile
If your request was denied because of high credit card balances or a low credit score, focusing on improving your financial profile may help.
In this situation, it pays to:
- Consolidate or pay down debt
- Make all upcoming payments on time
- Avoid unnecessary loan or credit card applications
Some of these things may take time, but it’s worth addressing them and waiting to ask for a higher credit limit until you’ve resolved them.
Consider Getting Another Credit Card
If you need access to more credit and your limit increase request was denied, you may have better luck applying for a new credit card. Just be aware that this will generally result in a hard inquiry on your credit report.
The Dangers Of A Credit Limit Increase
A higher credit limit has certain advantages. But if you’re not careful, it could also introduce the following potential risks.
Overspending
One of the biggest dangers of having more credit is the temptation to spend beyond your means. A larger credit limit could create a false sense of financial flexibility, leading you to rack up more credit card debt that becomes unmanageable.
Increased Interest Charges
If you use your higher credit limit, you may end up carrying balances you can’t pay off in full. That could lead to higher interest charges, especially if your credit card has a high APR.
Credit Score Damage
A higher credit limit only helps your credit score if you manage it responsibly. If additional available credit leads to larger credit card balances and utilization, your score could take a hit. Plus, if you use your higher limit and fall behind on your bills as a result, your credit score could be damaged by late or skipped payments.
The Bottom Line: A Credit Limit Increase Can Offer Flexibility and Extra Security – When Managed Properly
In some cases, you may be able to get a credit limit increase just by asking, especially if you time that request strategically. An increase could provide you with more flexibility and help your credit score improve – but it’s important not to abuse that higher limit. Overspending, carrying large balances and racking up interest charges could quickly outweigh the benefits of having more available credit.
Ready to explore cards with higher limits and better rewards? Learn more about credit card options to find one that fits your spending habits.
Maurie Backman
Maurie Backman has more than a decade of experience covering personal finance topics that include mortgages, loans, retirement, Social Security, and investing. Prior to becoming a full-time writer, she worked in the financial industry as well as in product design and marketing. Maurie holds a bachelor's degree from Binghamton University, where she studied creative writing and finance. She was happy to combine her two areas of study into a career that allows her to educate consumers on a host of financial topics.
