Simply put, your credit limit is the maximum you can spend on your credit card. Raising your credit limit can give you more purchasing power and perhaps even boost your credit score — as long as you don’t see it as an opportunity to spend more than you can repay.
Read on to learn how to request a credit limit increase from your issuer, as well as the various risks and benefits of increasing your limit. Below are tips on how to determine ifraising your credit limit is the right decision for you.
How to request a credit limit increase
If you’re ready to handle a larger credit line, there are typically two ways to request a credit limit increase on your credit card: online or by calling the number on the back of your credit card.
Online request
Some issuers allow you to make a credit limit increase request via your credit card’s online portal. Your first step is to log in to your account online. Review your customer profile to ensure that all the information is up to date and correct. There is typically a field where you can update your income, which can be especially helpful to your request if your income has recently increased.
For Chase credit card accounts, for example, you can log in and navigate to the “More” tab, where menu items such as account services and card benefits are located, and click on “Request a credit limit increase.”
Phone request
On the other hand, some issuers, such as Wells Fargo, require you to call to ask for a higher limit as there is no online request option.
When calling your issuer, tell the customer service representative you’d like to request a credit limit increase on your card. The representative should review the account and inform you whether or not you are currently eligible for a credit limit increase. If you aren’t immediately eligible, the rep should be able to tell you the reason why not, and when or if you will be eligible in the future.
If you are eligible for a credit limit increase and the rep asks how much of an increase you’re looking for, keep your request reasonable. For example, if your current credit limit is $1,500, you could try asking for a $3,000 increase, but maybe not $10,000 — unless your financial situation has undergone a dramatic change that could justify such a large boost.
Either way, the issuer will typically let you know how much it is willing (or not willing) to raise your limit after reviewing your account history, income, credit profile and credit score.
“As a Navy Federal member, you can easily request credit limit increases through online banking, by phone, or visiting a branch. When reviewing a credit limit increase request, Navy Federal reviews many factors to determine credit worthiness to include your credit bureau reports, employment information, income details, and housing expenses. Generally, Navy Federal only grants line increases after three months of on-time payments and no more than once every six months,” says Rick Conyers, assistant vice president, credit card products at Navy Federal Credit Union.
Note that in many cases, the issuer will run a hard check on your credit score before determining if and by how much they will raise your limit. It may take several days before you hear back from them with an answer to your request.
What to consider before asking for a credit limit increase
There are a few factors to consider before asking for a credit limit increase.
One important consideration is how long you’ve had the card on which you want a higher limit. Card issuers have certain policies in place that must be met before a credit limit request is granted.
For example, Capital One won’t consider a credit limit increase on a card account that has been open for just a few months or if a credit limit increase or decrease has been recently initiated.
Generally speaking, you should have a card six months to a year before a credit limit increase will be considered. Here are some questions to ask yourself before requesting an increase:
- Is your existing credit limit maxed out? If so, you may want to pay down your balance before making a credit limit increase request.
- Have you applied for several new lines of credit recently? If so, you may want to hold off asking for a credit limit increase as the issuer might determine you could be struggling financially and are desperate for credit.
- Will a higher credit line tempt you to spend more? The higher your credit card balance gets, the more difficult it can become to pay it off. You want to avoid spending more than you know you can repay.
- Has your income increased from when you initially applied for the card? If so, you may have a better chance of getting your credit limit request approved.
- Is the current economic climate favorable to your request? In bad economic times, financial institutions experience some belt-tightening and generally don’t want to risk more exposure. Therefore, they may deny any credit limit increases until conditions are better.
Strategies to improve your chances of getting approved for more credit
The best candidates for getting a credit limit increase approved are those who have exhibited responsible borrowing and repayment behavior over time. Some other positive factors include the following:
- You pay your credit card bills on time, every time, as well as any other debts you have.
- You avoid maxing out your existing credit line and tend to keep any revolving balance well below your credit limit.
- Your income has increased.
- Your existing debt load has decreased or is manageable in relation to your income.
- You haven’t applied for multiple new lines of credit recently.
- You’ve had the card account you want to increase the limit on open and active for six months or more.
It may seem odd to be penalized for using all or most of your available credit — after all, maybe that’s why you want a higher limit. However, lenders like to minimize risks and prefer to grant credit line increases to customers who won’t get into financial trouble with more borrowing power.
Can a credit limit request hurt your score?
A credit line increase can hurt your credit score, at least temporarily, if the card issuer performs a hard inquiry on your credit reports to determine your eligibility.
A hard inquiry can knock your credit score down a few points. Its impact lasts only a year (even though it stays on your credit reports for two years). The lower your credit scores, the bigger an impact as every point counts. A few points shaved off a higher credit score will have less impact.
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If you’re concerned about the damage a hard inquiry may have on your credit score, you should ask the card issuer whether a hard inquiry or soft inquiry will be done when reviewing your credit limit increase request.
A soft inquiry does not negatively impact your credit score. Oftentimes, existing creditors can check your credit without performing a hard inquiry. However, a card issuer may have a policy where only a hard inquiry will suffice when granting credit limit increases.
Can a credit limit increase improve your credit score?
Not only will a credit limit increase provide more flexibility should you happen to need the extra borrowing power, but it can also give your credit score a nice boost — provided you don’t abuse it by maxing out your new credit limit.
Next to payment history, which accounts for 35% of your FICO Score, “amounts owed” carries the most influence by making up 30% of your score. Credit utilization ratio is a big factor in the amounts owed analysis. Your utilization measures the amount of debt you are carrying (your credit card balance) against the amount you can borrow (your credit limit).
If your credit card limit happens to be so low that you routinely charge up to the limit, you will have a high credit utilization ratio. For example, if your limit is $500 and your balance averages around $400 a month, your credit utilization ratio runs around 80%.
The general guidance for an acceptable credit utilization ratio is 30% or less. So, if your credit limit is increased to $1,500, that $400 monthly balance will drop your credit utilization ratio to around 27%. This can help improve your credit score.
Know that your credit utilization ratio is measured not only by individual credit cards, but across all your credit card accounts as well. If you have multiple credit cards, just add together all their credit limits and balances and divide the total balance by the total credit limit.
Here’s an example to illustrate individual and combined credit utilization ratios:
| Credit limit | Balance | Utilization ratio | |
|---|---|---|---|
| Card A | $500 | $400 | 80% |
| Card B | $1,500 | $400 | 27% |
| Both cards combined | $2,000 | $800 | 40% |
Only revolving credit accounts impact utilization ratios. Loans, such as mortgages or auto loans, do not factor into credit utilization as they have a fixed borrowed amount and fixed payments.
If you are confident you can keep your balances in check with a higher credit limit, upping those credit limits can give you peace of mind and likely boost your credit score at the same time.
Frequently asked questions (FAQs)
It can take anywhere from a few minutes to several weeks, depending on the issuer’s policies and whether you are currently eligible for a credit limit increase.
Some credit card issuers will automatically increase your credit limit as you use the card responsibly by keeping your balance low and making on-time payments. Also, if your income has changed for the better, you can update that info on your credit card profile, which might trigger a credit limit increase.
The easiest way to increase your credit limit is to call the card issuer to find out if you’re currently eligible for a credit limit increase. You can also see if your issuer has an option online to request a credit limit increase.
The average combined credit limit across each consumer’s credit card accounts was $30,233 in 2021, according to credit bureau Experian. However, the younger and less experienced you are using credit, the more likely you’ll receive lower credit limits initially. Older consumers with higher credit scores, higher incomes and a long history of responsible card usage will generally be granted higher credit limits.
The credit limit (or credit line) on your credit card is a set amount of money the card-issuing bank decides to lend you when it reviews and approves your credit card application.
As a cardholder, you can generally charge purchases up to the amount of your credit limit. Once you make a payment, those funds are added back to the amount you can borrow, minus any interest charges or fees. Essentially, you borrow and repay funds within the confines of the credit limit provided to you.
When you apply for a credit card, the issuing bank will review the information you included on the application to determine if you qualify, such as income, employment status, monthly rent/mortgage payment, etc., as well as your credit history and credit score.
If you’re new to credit, you may only be approved for an initial credit limit of a few hundred dollars. That’s because until you’ve proven yourself a responsible borrower, the bank doesn’t want to risk lending too much money to someone who may not repay what they’ve borrowed.
Your credit profile may also reveal that you’re carrying a lot of debt, which could result in you being granted a lower credit limit — assuming your application is approved at all, that is.
On the other hand, if the bank’s credit report review reveals that you’ve successfully managed numerous types of loans and credit lines over many years, you may be granted a credit limit in the thousands of dollars as you’ve shown yourself to be a responsible and low-risk customer.
There are always exceptions to the rules, of course, but the higher your credit score, the lower your current debt load and the longer you’ve exhibited responsible borrowing behavior, the more comfortable a financial institution will be in granting you a generous credit limit.
