How to Increase Your Credit Limit
5 Min Read | Last updated: October 31, 2024
Learn how you can increase your credit limit and boost your credit score. Explore the different pros and cons of credit limit increases.
At-A-Glance
- An increased credit card limit can provide a financial cushion and even boost your credit score.
- But a higher credit limit might not be for everyone.
- Several factors can improve your chance of increasing your credit limit.
Your credit limit, as the term suggests, is how much credit your card issuer is willing to extend to you. Your credit card limit depends on several factors, including your credit history, monthly income, and card issuer’s policies. But did you know that your credit limit isn’t set in stone?
That’s right. Sometimes your credit card company might surprise you with an unrequested increase. Other times you’ll have to request a higher limit. But be aware that your card company can also reduce your credit limit.
If you’re considering requesting or accepting a credit card limit increase, here’s a how-to on what you can do.
How to Increase Your Credit Limit
There are a few ways to get a credit limit increase:
Use your card responsibly and just wait.
Sometimes your card issuer will automatically increase your credit limit after you’ve consistently demonstrated that you use the card responsibly. This includes making on-time payments and paying your balance — all while using the card frequently.1
Sometimes you have to ask.
If you haven’t received an automatic increase, it doesn’t mean you’re not eligible. You might just have to ask! Card issuers may let you request a credit card limit increase online or by phone. Your card company will probably assess personal information to determine your level of financial risk. Personal information usually includes your employment status, gross income, and mortgage or rental payments.2 They might also ask why you want a credit limit increase.
Consider a new credit card.
If you have a history of good — or great — credit, a new credit card with a higher credit limit may be a possible option to consider. And, even if your new card doesn’t have a higher limit, opening a new line of credit will have the same effect by increasing your total available credit.
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Whether you make a request, wait for an automatic increase, or apply for a new card, the chances of boosting your credit card limit could improve if:3
- Your income has recently increased.
- You have been consistently paying your statement on time without using a large percentage of your credit line.
- You have a good credit score.
Is it Good to Increase Your Credit Limit?
If you’re financially stable, maintain a low balance, and pay your statement on time, increasing your credit limit can open up new financial opportunities. For one thing, a higher credit card limit can provide more financial flexibility — extra money available for emergency car repairs or a last-minute plane ticket home for the holidays. It can also help you make a larger-than-usual purchase.
A higher credit limit can also boost your credit score by lowering your credit utilization ratio — the percentage of your total credit limit you’re currently using.
For example, say your credit limit is $5,000 and your most recent statement balance is $2,500. This means you used 50% of your total limit. But if your credit limit increases to $10,000, you’re using only 25% of your credit limit. Why do those percentages matter? Keeping your credit utilization rate at or below 30% is a good rule of thumb for helping you to have a good credit score.
Is it Bad to Request a Credit Limit Increase?
If you struggle with overspending, increasing your credit limit can sometimes bring more trouble than it’s worth. With more money to spend comes a greater potential to tack on debt and possibly negatively impact your credit score. And if you end up missing payments or max out your card often, your card company might consider your behavior risky and decrease your limit.5
Put simply, if you worry about whether you’ll be able to use your higher credit card limit responsibly, it may not be for you.
It’s also worth noting that some card issuers cap the total credit they extend to you. If that’s the case, you might not want to increase your credit limit if it will prevent you from increasing the limit on another account or from getting another card from that issuer.
A Credit Limit Increase Request Can Impact Your Credit Score
You might also be wondering if requesting a credit-limit increase will affect your credit score. It depends. If your card issuer pulls a hard credit report to assess your financial risk, you might see a minimal decrease on your credit score.2 If you’re approved and your credit utilization ratio decreases, your score increase might outweigh the decrease.
And if you’re denied, don’t worry. It happens. Meantime, keep using that credit card and keep your payment history clean. How often you can request a credit limit increase depends on the card issuer, but unless you’ve received an increase within the last six months, many will let you ask as often as you like.3 However, you probably won’t be approved until you’ve shown several months of consistent, healthy payments.
The Takeaway
Card companies sometimes reward responsible behavior by automatically increasing your credit limit, but you can also request an increase. Even though such a request might ding your credit score, the positives of a higher credit card limit often outweigh the negatives — as long as you’re financially responsible.
1 “Credit Limit Increases: What to Know,” Equifax
2 “When to Request a Credit Limit Increase,” Experian
3 “Asking for a Credit Limit Increase & What to Expect,” Equifax
4 “How Owing Money Can Impact Your Credit Score,” myFICO
5 “Can my credit card issuer reduce my credit limit?,” Consumer Financial Protection Bureau
Megan Doyle is a business technology writer and researcher whose work focuses on financial services and cross-cultural diversity and inclusion.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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The material made available for you on this website, Credit Intel, is for informational purposes only and intended for U.S. residents and is not intended to provide legal, tax or financial advice. If you have questions, please consult your own professional legal, tax and financial advisors.
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