When you open a new credit card, the issuer assigns you a credit limit — the maximum amount you can spend on the card. But credit limits can change over time.
In some cases, you can request a credit limit increase or your issuer may even give you an automatic credit limit increase, based on factors like your credit history, payment history, or changes in your income information.
Increasing your credit limit can improve your credit utilization ratio, so you could see a bump in your score pretty fast — within one to two billing cycles. Plus, you’ll have access to more money in case of emergencies and the ability to responsibly charge larger purchases on your credit card.
A credit limit increase can also be detrimental if you don’t use it responsibly. You can quickly take on long-lasting debt if you use the new limit to spend more than you can afford.
“The whole point of this increase is to raise your credit score and put you in a better position to get lower interest rates on mortgage, car loans, and personal loans,” says Farnoosh Torabi, NextAdvisor contributing editor and host of “So Money” podcast. “It’s not to get you further into high-interest credit card debt.”
Here’s how to increase your credit limit, and how to use your higher credit limit responsibly.
How to Increase Your Credit Limit
Requesting a credit limit increase is straightforward, but sometimes it can involve a little bit of legwork, depending on your credit card company. If you think it’s the right time to raise your limit, there are several ways to ask.
1. Request a credit limit increase online
Nowadays, you can usually request a credit limit increase online. Once you sign in to your account, look for an option to submit a request. You may be prompted to provide some additional personal information, such as income, employment status, monthly housing payments like rent or mortgage, or existing debt. Unless there’s an online chat feature, requesting an increase online means you won’t be able to ask any questions.
Before you request a credit limit increase, ask your credit card issuer if a credit check is required, and whether it’s a hard or a soft pull.
2. Call your credit card issuer
There’s typically a customer service phone number on the back of your credit card. Once you get on the phone with a representative, ask whether it’s possible to get a higher credit limit. The representative may ask you a few questions, such as why you want an increase or whether you’ve recently received a pay raise. It’s important to be honest about the reason behind your credit limit increase request.
“When you get on the phone with customer service, mention that you’d like to increase your credit limit, not because you’re in any sort of dire situation. You want to prove to them that you’re going to be good for the money,” Torabi says.
3. Wait for automatic increases
If you’ve had a credit card for a while and demonstrate you’re responsible with it, your bank may automatically raise your credit limit, without you having to ask. You can increase your odds of getting an automatic increase by making on-time payments and using your credit card frequently. But you shouldn’t carry a large balance month to month. Basically, if you get an automatic increase, your card issuer thinks you’re responsible enough to handle more credit.
“Staying in good standing with your credit card issuer(s) is always a great strategy. It’s good for your credit, it’s good for your wallet, and it’s going to work in your favor when you want to ask your issuer for things like credit limit increases,” says Michelle Black, a credit card expert and personal finance writer. “They’re going to look back at your account history and see how you’ve managed the credit limit you have now.”
4. Apply for a new card
If you don’t want to request a credit limit increase, applying for a new credit account is an option, as long as your credit history and credit score are good.
Credit card companies may also provide information about credit limits before you apply. Your exact limit is based on your application, like annual income and other factors in your credit report.
The new credit line may not be very high, but it still increases your overall available credit, which can improve your credit utilization rate. Beware that applying for new credit usually results in a hard inquiry on your credit report, which affects your credit score. So, avoid applying to multiple credit cards at once.
How a Higher Credit Limit Can Help You
Increasing your credit limit can have some upsides if you’re a responsible cardholder. A higher credit limit can boost your credit score as long as you maintain a low credit utilization ratio, and can make future borrowing less expensive. If your credit score decreases partly due to a higher credit limit, you may be eligible for lower interest rates in the future.
Does requesting a credit limit increase hurt your score?
Whether an issuer pulls a hard credit inquiry before deciding to give you a credit increase depends on the issuer’s tolerance for risk.
That’s why you should call your credit card issuer to see if there will be a hard or soft pull on your credit. Sometimes when you ask for a smaller increase, typically under $2,000, it will only trigger a soft inquiry, which won’t affect your credit score.
“Often, the boost can be issued right away over the phone, no credit check required,” Torabi says.
But even if there is a hard inquiry, the benefits of a higher credit limit usually outweigh the temporary hit to your credit score in the long run.
For one, a bigger credit limit can help you keep your credit utilization rate low. Credit utilization plays a big role in your credit score — in fact, it’s the second-most influential factor in calculating credit scores. If your credit line increase helps you maintain a credit utilization lower than the recommended 30%, it can help you maintain a good credit score over time.
On the other hand, if you use the majority of your increased credit limit, lenders may see you as risky based on your credit utilization ratio. On top of that, spending more than you can afford can lead to high-interest credit card debt.
How to Improve Your Odds of a Credit Line Increase
Before you call your credit card company or make a request online for a credit increase, there are a few steps you can take to improve your chances:
- Build a record of positive payment history by paying at least your minimum monthly payments — and ideally your full balance — on time each month to show responsible credit usage.
- Report if your income has changed since applying for the card. Getting a pay raise can help you qualify for a higher credit card limit since it can indicate increased creditworthiness to lenders.
- Consider how long you’ve been a cardholder and keep all of your accounts in good standing. Longevity and a positive relationship with your issuer can work in your favor when asking for a credit limit increase.
If you’ve checked all of the boxes, it may be a good time to ask for a higher limit. Some issuers may reward good credit activity by automatically giving you an increase, too. It’s not always clear when your credit card issuer will increase your limit, so it’s best to always practice good credit habits to better your chances when the bank reviews your account.
When Not to Increase Your Credit Limit
Timing matters when it comes to asking for a credit limit increase, so you should only do it if it’s going to better your overall financial situation. Ask yourself why you want a credit limit increase. If it’s for reasons like coping with an emergency or paying for a vacation, you shouldn’t ask for one. You should instead focus on building an emergency fund, and there may be other ways to deal with an emergency than to use more credit. As for travel, planning and saving for a dream vacation may take some time, but it can be done.
Don’t be discouraged if you’re not ready for a credit limit increase. You can always ask for one later, when the timing is right. Here’s when it doesn’t make sense to ask for a credit limit increase:
1. You requested too many lines of credit
It may be too soon since the last time you applied for new credit or asked to increase your credit limit. Too many requests can signal to lenders that you’re in financial trouble, especially if they happen in a short span.
This can be frustrating if you’re trying to build your credit score, but you don’t want to seem like a risky borrower. The best thing to do is to space out your requests and applications. Black recommends asking for a credit limit increase when you get a raise, so you can responsibly take on more credit.
2. Your credit score is low
Your credit score says a lot about your financial habits, so you likely won’t get approved for more credit if you haven’t built a good score. Lenders use your credit score as a decision-making tool to determine your risk as a borrower. If your score is in bad shape, it’s best to improve it first, wait a few months, and then ask for a credit limit increase.
3. You’re planning to spend
If you’re in a financial bind or looking to spend more money, requesting an increase on your credit limit is dangerous.
“If you actually plan to use this extra credit, and carry a balance month over month, this hack is not for you,” Torabi says.
It would only make it easier for you to fall deeper into debt and raise your credit card bill. So, before taking any action, ask yourself why you want or need more available credit.