How ask for a credit limit increase
There are many reasons why you might want to have a greater spending limit on your credit cards. Perhaps you have a major expense coming up, or you may want to increase your credit limit as a tactic to improve your credit score.
As you’re contemplating such a move, however, it’s important to remember that this type of request can trigger a hard credit inquiry and impact your credit score—making it important to be strategic about pursuing credit limit increases.
3 ways to request a credit limit increase
Submitting a request for a credit limit increase is typically very straightforward. The options include reaching out to your current credit card issuer either online or via phone. Yet another approach is to open an entirely new credit card that comes with a higher spending limit.
1. Online request
If your credit card issuer offers this option, making a request online can be the quickest way to pursue a credit limit increase. Doing so may require providing information about your current financial picture.
“You may have to provide information like your updated income and housing information before a decision is provided,” says Sara Breyfogle, senior vice president, and chief credit officer for Discover Financial Services.
As you submit your application, remember that reporting any income increases and having a track record of using your credit cards responsibly can improve approval odds.
2. Call your credit card company
If you prefer speaking to a credit card representative in person about your request, you can also call the issuer directly. Taking this approach can provide the chance to ask questions about the cardholder’s policies and procedures.
“You’ll likely be faced with similar questions [as an online request] and a credit check, but you’ll have the opportunity to find out what type of credit card check is required before undergoing anything,” says Stephen Ciliak, lending product manager at Alliant Credit Union. “It might also be beneficial to call if you have an urgent need for a credit increase, as the representative may be able to expedite the process.”
3. Open an entirely new credit card
The third approach to obtaining a credit limit increase is opening a new credit card, a step that may also come with additional benefits, such as an 0% introductory purchase or balance transfer APR or access to various rewards programs, including cash rewards or travel rewards.
3 things to do before requesting a credit limit increase
You can increase the odds of a credit increase request being approved by taking a few proactive actions in advance to improve your credit score and profile. Reviewing your income and aligning your request with any income increases can also be a helpful approach.
Improve your credit score
The first step to take before requesting a credit limit increase is to check your current credit report and take steps to increase your score, if necessary.
“Many people don’t realize that their credit report could contain errors and that some of those errors could have a negative effect on their credit score,” says Breyfogle. Get into the habit of reviewing your credit report regularly, at the very least on an annual basis, and disputing mistakes. If a payment was reported as late when you made it on time, for example, fixing that error could help to improve your credit.”
As you’re reviewing your credit report, don’t just look for mistakes. It’s also important to scan the report with an eye toward other elements that may be dragging your score down. This could include having a high credit utilization ratio, for instance, which means you’re using a substantial share of your available credit balances.
“A great guideline for using your credit card is to use less than 30% of your credit limit on any card. The lower the percentage the better,” says Ciliak. “A great way to boost your score is ensuring you pay down your balance before the end of each month or a few times throughout.”
Make sure you have a history of on-time payments
Your debt repayment history is another major factor that credit card issuers consider when reviewing applications for a credit limit increase and new credit card applications. A consistent history of making credit card payments on time will help bolster your application.
“Ensure that you have been using your credit cards responsibly,” says Jason Gaughan, head of consumer credit card products for Bank of America. “This means making sure you pay on time… By maintaining a track record of responsible credit management, you’ll be able to maintain a strong credit score and subsequently make it easier for a credit card issuer to grant an increase to your credit limit.”
It’s important to understand that when you do make late payments, it can impact your credit score for a long time—up to seven years or more.
Review your annual income
Did you get a raise during the past year or add a new source of income? These sorts of changes can make it easier to get your credit limit increase approved. Many card issuers allow you to automatically update income information on your account via their websites. If so, do this in advance of making your request.
In addition, if you expect to get a raise in the near future, it may make sense to wait until after that increase takes place to request a credit limit increase.
Drawbacks of asking for a credit limit increase
While a credit limit increase can have various benefits, including providing the opportunity to lower your overall credit utilization ratio and improve your credit score, there are a few potential drawbacks to consider.
If you’re not good at managing and repaying debt, it may not be a wise step to increase your spending limit. This is particularly true for those who have a tendency to get in over their heads with credit card usage.
“In some cases, having a higher credit limit could do more harm than good—if an increased credit limit tempts you to overspend, for example,” says Breyfogle.
You could ultimately end up hurting your credit score in the long run if you max out your higher balance without repaying your cards in full or making significant payments each month.
Even if you are a responsible credit card user, you may hurt your credit score simply by requesting the increase and triggering a hard credit inquiry. Consider checking with your credit card issuer to confirm whether or not it conducts hard credit inquiries as part of a review, before making your request. Too many of these types of inquiries within a short time frame could cause lenders to hold off on approving your request.
Frequently asked questions
Is it easy to get a credit limit increase?
The answer is different for everyone. It depends on your unique financial profile. “Credit card issuers consider different aspects when setting limits, including credit score, credit history, income, debt as a percentage of income, and limits on other credit cards,” says Gaughan.
What triggers a credit limit increase?
In some instances, cardholders may earn an automatic credit limit increase from an issuer. This may happen if the cardholder has had the credit card for a long time or has a history of using it responsibly and consistently making on-time payments.
How long does it take to increase a credit limit?
Depending on your card issuer and its information collection process, a new credit limit could take anywhere from a few minutes to a few weeks to be implemented. To speed up the process, it’s best to speak directly with a representative from your card issuer.