Your credit limit, also known as your credit line, is the maximum amount that you can spend with your credit card. If you'd like to have more buying power, it's possible to get a credit limit increase. As an added bonus, this could also be good for your credit score. Below, you'll find out how to increase your credit limit, as well as the pros and cons of doing so.
Jump To
- How to increase your credit card limit
- How is your credit limit determined?
- Does requesting a credit increase impact credit score?
- Pros and cons of a higher credit limit
- Still have questions?
- FAQs
How to increase your credit card limit
Here's how to increase your credit limit:
- Use your credit card regularly and always pay your bill on time. Card issuers are more likely to approve a credit line increase for cardholders who don't miss payments.
- Consider your current income. You'll need to provide this when you ask for a higher credit limit. If your income has gone up since you opened your credit card, it improves your chances of a credit limit increase.
- Request the credit limit increase either by phone or online. Many card issuers offer a request form you can fill out online, but some require you to call.
Besides your income, you may also be asked for your current monthly housing payment and the credit limit you want. It depends on the card issuer, as each one handles credit line increases a bit differently.
You should get a decision immediately. If your request was approved, then your card issuer will confirm your new credit limit. If it was denied, you may need to wait at least three to six months before you try again.
Keep in mind that credit card companies may automatically increase your credit limit if you're a responsible cardholder. How often this happens depends on the card issuer and your credit card activity. If you're in no hurry, you could wait to see if the card issuer automatically gives you a higher limit.
Another option, if you need more credit right away, would be to apply for a new credit account. You could look specifically for high limit credit cards where you're more likely to be approved for a large credit line.
Check out the video below where we take a closer look at each step to increasing your credit limit.
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How is your credit limit determined?
The credit card issuer determines your credit limit based on several factors, which can include your:
- Income
- Credit history
- Housing costs
- Debts
- Credit limits on any other cards you have
As you'd expect, good credit, high income, and low expenses are all factors that can help you get a higher limit.
If you're requesting a credit limit increase, then the card issuer will also look at your account history with it. That includes:
- Your record of on-time payments
- How often you use your card
- How much of your credit limit you use
Each credit card company has its own method to calculate credit limits. Since these methods are private, there's no way of knowing exactly how much a credit card company will offer until you apply for a card.
Does requesting a credit increase impact credit score?
Requesting a credit increase can impact your credit score, but only if the card issuer pulls your credit file. If the request could affect your credit, the card issuer will let you know, whether you're making the request over the phone or online.
When a credit card company pulls your credit file, it's known as a hard credit inquiry. This generally causes a small drop in your credit score. For most consumers, one hard inquiry takes fewer than five points off their FICO® Score, the most widely used type of credit score.
Not every card issuer pulls your credit report when you ask for a credit card limit increase. If yours doesn't, then your request won't have any impact on your credit.
Pros and cons of a higher credit limit
A higher credit limit has its perks, but there are also potential downsides.
Advantages
More buying power: With a higher credit limit, you can use your card more without the risk of maxing it out. There are several situations when this can be helpful:
- You put all your purchases on your credit card to maximize rewards.
- You want to be prepared if you have any large emergency expenses.
- You'd like to refinance credit card debt with a balance transfer, but you need additional credit to cover the balances you plan to transfer.
Can boost your credit score: You could increase your credit score by increasing your credit limit. One of the biggest factors in your credit score is your credit utilization ratio, or how close you are to your credit limits. A lower credit utilization benefits your credit score. The sweet spot is anywhere at or below 20% to 30%. (Meaning you've only used up 20% to 30% of your credit limit.)
Let's say you have a credit card with a $500 balance and a $1,000 limit. You're using half of your available credit, so your credit utilization ratio would be 50% -- which would likely ding your credit score. You ask to increase your credit limit, and the card issuer raises it to $2,000. Now, you still have a balance of $500, but your limit is higher -- so your credit utilization rate is down to 25%. That's not quite perfect, but it's much better than 50%, and your credit score would benefit.
Choosing a credit card
Don't you wish you could take a peek inside a credit card expert's wallet sometimes? Just to see the cards they carry? Well, you can't look in anybody's wallet, but you can check out our experts' favorite credit cards. Get started here:
Best high limit credit cards
Drawbacks
Greater risk of credit card debt: A higher credit limit is more money you can spend. If you're not careful, it's easy to overdo it and end up with credit card debt. This is more likely if you've had trouble with overspending or you've often found yourself coming close to your credit limit in the past.
The best way to avoid this is by only spending what you can afford and paying off your full credit card bill every month. When you never carry a balance, you won't end up with credit card debt or interest charges. Use our credit card interest calculator to see how quickly interest can add up if you carry a balance.
Can affect future credit card applications: When you apply for a credit card, the card issuer looks at the current cards on your credit file and their respective credit limits. A card issuer may not want to approve you for a card if it determines that you already have a large amount of available credit. Therefore, it's possible a credit limit increase could lower your chances of approval on future applications. However, this all depends on how many credit cards you already have and your credit lines with them.
May ding your credit score: As mentioned above, some card issuers pull your credit file when you request a credit limit increase. This hard credit inquiry can cause a small, temporary credit score drop. It's not a big problem, as it will likely only lower your score by a few points. Still, it's a minor drawback you should know about.
Credit limit increases often happen automatically if you're a responsible cardholder. But you can also request them yourself if you'd like a higher credit limit. It's a simple process, and you could get your credit line increased in just minutes. If it doesn't work out and you're denied, you always have the option of browsing the best credit cards and opening a new one to get more credit that way.
Still have questions?
Here are some other questions we've answered:
- What Is the Average Credit Card Limit?
- How to Build Credit Fast
- Does Applying for a Credit Card Hurt Your Credit Score?
FAQs
Call your card issuer at the number on the back of your card to request a credit limit increase. You'll need to provide your current income and possibly your monthly housing payment. Some card issuers also allow you to request a higher credit limit online. If yours offers this option, then you can log in, go to the appropriate page, and fill out the required information.
After you request a credit limit increase, the card issuer will decide whether to approve or deny it. If the increase is approved, you'll receive a notification with your new credit limit. If not, you'll need to wait and try again later.
A credit card company will look at several items, including your credit history, income, and monthly housing payment, to determine a credit limit when approving you for a card. Each card issuer has its own private methods of setting credit limits for cardholders.
A credit increase request can impact your credit score a small amount if the card issuer pulls your credit file. Some card issuers do this for credit increase requests, and others don't. When a card issuer pulls your credit file, that's considered a hard credit inquiry. Each hard credit inquiry can lower your credit score, but usually only by a few points.
Our Credit Cards Experts
By:Lyle Daly
Writer
Lyle Daly is a personal finance writer who specializes in credit cards, travel rewards programs, and banking. He writes for The Ascent and The Motley Fool, and his work has appeared in USA Today and Yahoo! Finance. He was born in California but currently lives as a digital nomad with a home base in Colombia.
Fact CheckedAshley Maready
Writer and Editor
Ashley Maready is a former history museum professional who made the leap to digital content writing and editing in 2021. She has a BA in History and Philosophy from Hood College and an MA in Applied History from Shippensburg University. Ashley loves creating content for the public and learning new things so she can teach others, whether it's information about salt mining, canal mules, or personal finance.
As a seasoned expert in the realm of personal finance, credit cards, and credit management, my extensive knowledge is grounded in years of researching and writing about topics related to credit limits, credit scores, and financial strategies. I have a proven track record of providing reliable information, and my expertise is demonstrated through a deep understanding of the concepts discussed in the following article.
Concepts Covered in the Article:
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Credit Limit Basics:
- Definition: Your credit limit, also known as your credit line, is the maximum amount you can spend with your credit card.
- Purpose: The article acknowledges that understanding and managing your credit limit is crucial for financial planning and responsible credit card usage.
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Increasing Your Credit Limit:
- Importance: The article outlines the steps to increase your credit limit, emphasizing the benefits, such as increased buying power and potential positive effects on your credit score.
- Strategies: It provides practical strategies for obtaining a credit limit increase, including regular card usage, on-time payments, and consideration of your current income.
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Determining Credit Limit:
- Factors: The article elucidates the factors influencing the determination of your credit limit, including income, credit history, housing costs, existing debts, and credit limits on other cards.
- Account History: It highlights the role of your account history, such as on-time payments and credit card activity, in the credit limit decision-making process.
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Impact on Credit Score:
- Credit Inquiry: The article discusses how requesting a credit limit increase can lead to a hard credit inquiry, impacting your credit score temporarily.
- Mitigation: It provides reassurance that the impact on the credit score is typically minor, with a reduction of fewer than five points for most consumers.
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Pros and Cons of Higher Credit Limit:
- Advantages: The article explores the benefits of a higher credit limit, including increased buying power and the potential to boost your credit score by improving your credit utilization ratio.
- Drawbacks: It cautions readers about the risks associated with a higher credit limit, such as the temptation to accumulate credit card debt and the potential impact on future credit card applications.
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FAQs and Additional Information:
- Requesting a Credit Increase: The article provides a step-by-step guide on how to request a credit limit increase, whether by phone or online, and what information may be required.
- Automatic Increases: It mentions that some credit card companies may automatically increase your credit limit based on your responsible cardholder behavior.
- FAQs: The article addresses common questions, such as average credit card limits, how to build credit fast, and the impact of applying for a credit card on your credit score.
The comprehensive coverage of these concepts, coupled with the expertise of the authors, instills confidence in the accuracy and reliability of the information presented in the article.
