If you’ve been thinking about requesting a credit card limit increase, you’re not alone. In 2023, 14.4% of consumers reported applying for one in a survey from the Federal Reserve Bank of New York’s Center for Microeconomic Data. That marked an increase of nearly 3 percentage points from 2022.
Approval for a higher limit on your credit card isn’t automatic, though. In the same survey, 30.9% of applicants reported being denied last year. Read on to learn more about how to increase your credit card limit and whether the pros of getting more spending power outweigh the cons.
Understanding your credit card limits
When you opened your credit card, the issuer likely reviewed a range of information to set your limit, including your credit score, income and other debts. Credit card limits, however, aren’t set in stone. Lenders keep an eye on your account for signals of whether to increase or decrease the limit.
Decreases might happen if you miss payments, max out your card or engage in other behavior your issuer sees as risky. Increases, on the other hand, can happen when you make yourself look even better in the lender’s eyes, such as by making all your payments on time or increasing your income.
When are you eligible for an increased credit line?
Eligibility requirements for an increased credit line may depend on your issuer and credit card. In general, a record of responsible behavior, such as making all your payments on time, will be useful. If you recently got a raise, that can help, too.
Some cards advertise automatic credit line reviews. For example, Capital One’s secured credit cards and cards for fair credit promise to review accounts for credit limit increases starting as soon as six months after account opening. The Chase Slate Edge℠ offers an automatic review to card holders who make all their payments on time and spend at least $500 on the card in their first six months.
Even if it’s not advertised, issuers may automatically offer increases based on your account history. If your credit limit doesn’t go up on its own, you can contact your issuer to request a boost.
How to request a credit limit increase
With many credit card issuers, including Bank of America and American Express, you can request a credit limit increase through your online account. If you do not see this option, or if you’d prefer to talk to a customer service representative, call the number on the back of your card.
Be prepared to share your up-to-date annual income, employment status and monthly housing payment (mortgage or rent).
Does requesting a credit limit increase hurt your credit score?
It depends on how the issuer accesses your credit information. If your issuer conducts a hard inquiry, your score may temporarily drop by a handful of points. If your issuer conducts a soft inquiry, it won’t affect your score, and only you will be able to see it on your credit report. You can ask your issuer what kind of credit inquiry to expect.
What to do if your request is denied
If your request for a higher limit is denied, your issuer might send a letter explaining why they didn’t approve you. If you don’t receive information, you can call customer service to ask.
To improve your odds for a future request, make sure you check all the boxes of responsible credit use, including paying your bill on time and paying more than the minimum payment obligation. If you were rejected for not making big enough monthly payments, Capital One advises waiting at least three months to reapply. Additionally, the issuer might indicate that you aren’t using the card enough. If that’s the case, consider using it to cover some of your regular expenses while setting reminders to make your payments each month.
Benefits and risks of a higher credit limit
Before you request a credit limit increase, consider what the pros and cons will be if you’re approved.
Benefits
- More spending power: The ability to charge more to your card can make life a lot easier. If you start with a credit limit of just $500, it can be difficult to use your card for many expenses.
- More rewards: With more spending power comes extra runway to earn points, miles or cash back. You won’t have to constantly make payments to free up room on the card to rack up those rewards.
- Lower credit utilization ratio: When you increase your available credit, you have an opportunity to raise your credit score by lowering your credit utilization ratio. If you have a $400 balance on a card with a $1,000 credit limit, you’re using 40% of your available credit. If your limit increases to $1,500, that ratio drops to around 27%. In general, you should aim to use no more than 30% of your credit limit.
Risks
There’s just one big risk to consider with a credit limit increase, but it’s nothing to take lightly: A higher credit limit could entice you to spend more. Plan to treat that bigger limit as an additional room to cover purchases in your budget — not a reason to spend more than you can afford to pay off each month.
While you might worry about a hard pull on your credit report that knocks a few points off your score, don’t let this concern be the reason you avoid requesting an increase. In the long run, using a higher limit to your advantage by keeping your credit utilization ratio lower can lead to a higher credit score.
Alternatives to requesting a credit line increase
Instead of requesting an increase on your current credit card, you can also consider applying for a new one. If approved, you’ll accomplish the same key goal of increasing your purchasing power. At the same time, a new card might come with a different set of benefits or a rewards structure that diversifies your payment options. Just as when you request a credit limit increase, you should get your credit in the best shape possible before filling out an application. Some issuers offer credit card preapproval, so you can get a sense of which cards you’re most likely to be able to add to your wallet.
If you have more than one card with the same issuer, you may be able to transfer a portion of one card’s credit limit to another. This may be helpful if you don’t need more total credit, but want to use one of your cards for more expenses. If you want to pursue this option, call a customer service representative to see if it’s available.
Frequently asked questions (FAQs)
The best time to request a credit limit increase is probably when you have good news to share with your issuer, such as a higher income. You should also focus on having your account in good shape with a steady history of on-time payments and a low credit utilization ratio.
No, banks set their own standards for who qualifies for a credit limit increase, and they may also have different request processes. Many allow you to ask online, but in some cases, you will need to call customer service.
You may be able to raise your credit limit on multiple cards, even with the same issuer. However, be cautious of this move. Multiple inquiries to increase your borrowing power can be a red flag for lenders that signals you’re spending too much.
Your credit card issuer may automatically increase your credit card limit based on periodic reviews of your account.
The biggest risk of increasing your credit card limit is creating a temptation to spend more money. Additionally, your card’s issuer may initiate a hard pull on your credit to determine whether you’re eligible for an increase, which can knock a few points off your credit score in the short term.
