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Account management

How to increase your credit limit

A higher credit limit means more borrowing power – and potentially, a higher credit score


An increased credit limit can be beneficial to your financial health if you request it at the right time and use it responsibly. Here’s what you need to know.

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Getting a higher credit limit is almost always a good event in your financial life.

It provides you with more borrowing power and a flexible source of funds. If you have a rewards credit card, a higher credit line also gives you an opportunity to earn more cash back or points. Finally, having more available credit can also be beneficial to your credit score.

Sometimes you may receive an increased credit limit automatically, and other times you might need to contact your bank to request it. Read on to learn about how credit limit increases work and how you can improve your chances of getting one.

What is a credit limit?

Your credit limit is the maximum balance you can have on your credit card. It’s your spending limit determined by your issuer, and it can be increased or decreased depending on your financial situation and credit card usage.

See related: My credit limit was (almost) cut without warning

In some instances, you can go over your credit limit by a certain amount preset by your issuer. However, you’ll likely be charged with credit limit fees. Unless you’ve opted into such fees, a transaction that would exceed your credit line will be declined.

How your credit limit affects your credit utilization

Your credit card’s credit limit and how much of it you use affects not only your budget, but your credit health as well. Maxing out your cards can lead to significant credit damage and serve as a sign to lenders and creditors that you’re financially struggling.

“One of the most influential factors in your credit score is your credit utilization ratio or the amount of revolving credit you use in relation to the amount you have available, both for each individual card you own and as an aggregate of all your credit lines,” says Timothy E. Hansen, founder and CEO of Wealth Growth Wisdom, LLC.

That’s why simply making minimum payments on time isn’t enough if you’re striving for a high credit score. Among other things, you need to keep your credit utilization under 30%. Otherwise, your credit score may lose quite a few points.

This means that if, for instance, you reach a $3,000 balance on a credit card with a $10,000 limit, you may see your credit score decline. To avoid that, keep track of your credit card spending and keep your credit utilization ratio in the single digits for the best results.

This is where getting a higher credit limit can help as well.

“Taking on a higher credit limit by increasing the limit on your current cards … can help bring your credit utilization ratio down, as long as you can resist the urge to spend more once you get the additional credit,” Hansen explains.

For example, if you carry the same $3,000 balance but have your credit limit increased to $15,000, your credit utilization comes down to 20%, and you might see your score improve as a result.

What you need to know about getting a higher credit limit

Before you contact your credit card issuer to request more credit, it’s useful to know which factors issuers consider when determining your credit limit, how to negotiate an increase and what it can do to your score.

How credit card companies determine credit limits

Kevin Haney, president of Growing Family Benefits, explains that credit card issuers determine credit limits by considering data reported by other lenders and private transaction information.

Haney spent a decade as an executive with Experian working directly with many major credit card-issuing banks assisting with their risk management and marketing efforts.

“Consumer credit reports reveal how a person is handling their obligations with other institutions,” he says. “Banks set initial limits when opening an account. Plus, many receive periodic updates from the bureaus to adjust limits up to capture more significant wallet share and down to minimize losses when people start running into trouble.”

According to Haney, card transaction information that is not reported to the credit bureaus also goes into the equation. For example, cardholders who pay a large percentage of the balance each month are more likely to get an increase than those who make only the minimum payment.

“Also, the merchant type is a factor,” he adds. “For instance, a person who regularly gambles online could be less likely to receive an increase.”

How to request a higher credit limit

There are a few ways to get a higher credit limit.

Sometimes it doesn’t require any action from you. Some credit card issuers regularly consider cardholders for an automatic credit limit increase. Alternatively, you can ask for a higher credit line by contacting your bank. You can do so by submitting your request online on your bank’s website or by calling the number on the back of your credit card.

“After six to 12 months of perfect payment history, call any credit card company that you hold a balance with,” Nicole Schmied, founder of SmartCookie Hacks, suggests. “Ask for them to increase your limit. They don’t need to know if you have zero intentions of using it ­– but if you deserve the increase, you’ll get several points for having a lower utilization rate.”

Calling your credit card issuer might seem like an extra step when you can simply fill out an online form. However, speaking to a bank representative provides you with an opportunity to make your case.

Prepare for this conversation by deciding what you’re going to ask for. You might have your credit line doubled, but it’s not recommended to request such a significant increase as it may signal financial trouble to your creditor. Instead, you can typically count on a 10-20% increase, and there’s no harm in asking for a number on the higher end of this range.

It’s also a good idea to mention to the representative why you’re a good candidate for more credit. The reasons could include reaching a higher credit score tier, a positive change in income or simply a consistent record of on-time payments and responsible credit card usage with the issuer.

If you’re denied, don’t worry and try again in six months or later. Ask your issuer how you can improve your chances for the next time and follow that advice to work on your credit.

Does requesting a credit limit hurt your credit score?

Most of the time, automatic credit limit increases only trigger a soft inquiry, which doesn’t affect your score.

However, when you request a credit limit increase, your bank might perform a hard pull, depending on the issuer’s policies. Normally you’ll be made aware if that’s the case in advance. But if you haven’t, make sure to ask so you know what to expect.

See related: Hard inquiries vs. soft inquiries: What they are, how they affect your credit

A hard inquiry can take a few points off your credit score. Luckily, the impact of a single hard pull is rarely significant. While it will stay on your credit report for two years, it will stop affecting your scores in 12 months.

At the same time, multiple hard inquiries can result in a more serious impact and be interpreted by creditors as a move to get access to more funds in a desperate situation.

For this reason, avoid requesting a higher credit line with more than one issuer at the same time. Ideally, you should wait for at least six months before requesting more credit.

That said, it can be a good strategy to increase your credit limit every year. This is a positive credit habit that can help you ensure you proactively earn credit points on a regular basis while getting the most out of the cards you have.

How to request a higher credit limit with your bank

Every credit card issuer may have its own rules regarding credit limit increases. To learn about your issuer’s policies, choose your bank from the list below.

Final thoughts

Getting a higher credit line provides you with more borrowing power and can have a positive impact on your credit score. It can also have an opposite effect on your credit and finances if you ask for too much or too often and max out your credit cards.

When you get access to more credit, use it responsibly and keep your credit utilization ratio in mind. Your budget and your credit score will thank you.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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