How To Increase Your Credit Limit (2024)

There’s no precise measurement for how much credit you should have, but generally speaking, a higher credit limit is a good thing (assuming you manage your credit responsibly and don’t spend more than you can afford).

A credit increase is often the fastest, easiest way to increase your spending power. Having more available credit at your disposal means you will be better positioned to charge a large purchase or numerous smaller ones. Increasing your credit limit is also simpler than getting a new card since you’ll only have one account and bill to keep track of.

There are several opportune times to request a credit line increase. Graduating from school and entering the workforce is a great time to ask your issuer for a higher limit. Getting a pay raise or transitioning to a new, higher-paying job are also signals that you might qualify for additional credit access.

While each lender has specific criteria for granting increases, only established cardholders should expect to receive one. Sensibly, banks will only lend extra money to customers they have reason to trust, and that trust must be built over time.

If you’ve been approved for a credit increase, you can request another as soon as six months later. If you were denied, you’ll want to wait until you can demonstrate a pattern of responsible card use. Your odds will go up if you have improved your payment habits or if your credit score has gone up for other reasons.

Making sure your credit profile is up-to-date can help you obtain a quick decision since the card issuer will have less information to verify.

Before you request an increase, verify the address and phone number on file. More importantly, make sure your employment status and income are accurate. Many cards will also verify your current housing payments (mortgage and/or rent) to ensure a credit increase won’t overextend your budget.

You should alsoreview your credit report in advance to make sure there are no errors or fraudulent activity. Consumers are normally eligible for free credit reports each year (from Equifax and Transunion).If there’s incorrect or fraudulent activity, you’ll want tofix your credit reportbefore requesting a credit increase.

Also, if able, you’ll also want to pay down your existing credit card balances as much as possible. Card issuers will deem you a lower risk if you have lower existing debt levels.

These are all steps you should take regularly, even if you’re not planning on requesting a credit increase in the immediate future.

Typically, a credit increase request temporarily lowers your credit score by five to ten points but in the long run a credit limit increase may actually improve your credit score.

When you request a credit limit increase, many issuers may pull an updated copy of your credit report, which is known as performing a hard inquiry. This inquiry will become part of your credit record and often makes a small, temporary ding to your score.

However, if your request is approved and your credit limit is increased, you will have more available credit and a potentially lower credit utilization rate. These factors can lead to more substantial increases in your credit score for as long as you hold the card.

The top benefit of a higher credit limit is the ability to spend more on that single credit card, especially if you started with a relatively low limit that wasn’t enough to cover your necessary expenses.

By charging more to your card, you have the opportunity to earn additional rewards points or cash back as well as take advantage of included benefits, such as extended warranties or cell phone insurance. Typically, cash or debit card purchases don’t offer these same benefits.

Additionally, a higher credit limit can result in a lower credit utilization rate, which may even improve your credit score and qualify you for loans or additional credit applications at more favorable rates.

Credit Utilization

Even if you don’t anticipate overspending your current limit, requesting a credit increase can still be advantageous. When you keep your spending consistent but have a higher overall limit, yourcredit utilization ratewill drop. This can actually increase your credit score, as other lenders see that you’re not relying on your entire credit line.

A good rule of thumb is to keep your credit utilization rate at 30% or lower. Thus, if you have a $5,000 limit, this means carrying a $1,500 balance or less at any given time. If your credit limit was increased to $10,000, that same utilization rate rate would mean you could comfortably carry a $3,000 balance instead.

There are two ways to approach a credit increase: an online request or a phone call to your card issuer.

Request a Credit Increase Online

If you think you have a strong case for a credit increase, making a request online can be simple and effective. Most card issuers have a menu option to request a credit increase once you’ve logged into your account. Often, it takes just a click or two to submit your information, and you may even receive instant approval. Other times, you may need to provide additional information by secure message or phone.

Generally, this option is best if you think your odds of receiving a credit increase are high (i.e. the case is clear cut and does not require additional explanation). Incidentally, not all issuers will allow you to dispute the decision or re-apply immediately; there may be a requisite waiting period after denial.

Related: How To Get An American Express Credit Limit Increase

Request a Credit Increase by Phone

If you don’t think your case is straightforward, you may want to call your card issuer and speak with a representative. Speaking by phone will allow you to provide additional information beyond what will be available through online forms.

Calling is also a good way to find out what type of credit check your issuer requires in order to process your request. Soft inquiries won’t be evident to other lenders who evaluate your credit report, but hard inquiries are visible for at least 12 months. Hard inquiries can also temporarily lower your credit score by a few points. Ahard pull vs. a soft pullon your credit matters if you anticipate applying for a mortgage,auto loanor new credit card in the near future.

You may also want to make your request by phone if you have an urgent need for a credit increase, such as a large, imminent purchase. The associate you speak with can expedite the information collection process so that you don’t have to wait for follow-ups. Of course, you still might not get an instant decision.

Some card issuers will provide the reason your request was denied, in which case you should work on resolving the issue before making another request for an increase.

If you have a limited credit history, you might just need to establish your track record. Card issuers need to see a history of on-time payments and responsible credit usage to determine whether you qualify for more credit access.

If you’re unsure of the specific reason your request was denied, you’ll want to improve your general creditworthiness, by:

• Paying your credit card and other bills on time every month
• Making more than the minimum monthly payment and paying down existing balances where possible
• Lowering your credit utilization rate
• Settling any existing collections accounts

Lastly, if you were denied despite having excellent credit, you might need to use that specific card more often. Card issuers don’t always issue additional credit to cardholders who aren’t using the credit they already have.

When you are approved for a credit line increase, you’ll have access to the full amount immediately. If you requested the increase to make a specific purchase, be sure to stay within your planned budget and have a strategy to pay off the extra expense.

Some cardholders might be tempted to overspend with access to more credit. If that sounds like you, don’t request more credit than you actually need. Although it benefits your credit utilization rate, it is better to not have the temptation present. After all, responsible credit usage is the foremost way to maintain or improve your credit score.

More often than not, a transaction will be declined if the purchase amount will put you over your credit limit, potentially leaving you without a way to cover the cost of your purchase.

However, sometimes a charge will sneak through and put you over your credit limit. If this happens, you may get hit withfeesfrom your card issuer. In addition, they may raise your interest rate for a period of months or permanently or even close your credit account, especially if this happens more than once.

Keep in mind that your credit score can drop long before you get close to your credit limit. As a reminder, you want to keep your credit utilization rate under 30% for a healthy score so you should avoid nearing your credit limit. If you were to go over your limit, even by just a few dollars, you should expect a substantial drop in your score. That’s a red flag for credit issuers.

Tracking your monthly spending in relation to your credit limit simply requires logging into your account online or via an app (or calling the toll-free number on the back of your card).

Cardholders who have multiple credit cards with the same issuer may be able to shift part of their credit line from one card to another. This is an easy way to increase the spending power of one card without the issuer taking on additional risk. This can help if you need to make a large purchase in a single transaction or if you prefer the rewards or other benefits of a specific card.

Applying for a new card is an obvious alternative as well. This can be a great way to take advantage of new or ongoing cardholder benefits, such as awelcome bonus,travel rewards programor 0%introductory APR. This is also a way to obtain additional credit once you’ve already received the maximum credit line a single issuer will extend to you.

Related: Best Balance Transfer Cards In Canada