Getting a credit limit approved on your credit card might be beneficial or bad, depending on your financial situation.
If you can pay your credit card bill in full and on time each month, increasing your credit limit can give you more freedom while also lowering your credit utilization ratio, which can enhance your credit ratings.
However, if you have a habit of overspending, a bigger credit limit may exacerbate your problem. In this article, we’ll go over both strategies for reducing your credit utilization.
We will also be looking at an approach, which is asking for a credit limit increase, in detail.
We like the credit limit increase strategy because it allows you the chance to lower your credit utilization even if you don’t have the funds to pay off your credit card balance at the moment.
And lowering your utilization, no matter how you accomplish that goal, has the potential to improve your credit scores.
With that said, if you are indeed one of the wise consumers who’s followed the golden rules of credit card usage, here are 6 tips on how to get approved for credit limit increase:
Why Does Your Credit Limit Matter?
Lenders look at one or more of your credit reports and ratings from the three major credit bureaus: Experian, Equifax, and TransUnion when determining your creditworthiness.
Credit limits can have a significant impact on your credit scores.
Paying all of your bills on time is crucial. However, another important component in your credit scores is your credit usage ratio or the percentage of available credit that you use on credit cards.
Credit ratings are often better when credit utilization is low.
To demonstrate how credit utilization works, let’s look at the following scenarios:
- Louis has one credit card with a $5,000 limit. His balance is $2,500. Therefore, his credit utilization ratio is 50 percent.
- Meghan has two credit cards, each with a $5,000 limit. Her total credit card limits equal $10,000. Meghan’s credit card balances also total $2,500. However, because she has a higher credit line, her utilization ratio is only 25 percent, which could be better for her credit.
How will Louis be able to catch up? Of course, paying off his credit card debt is a wise decision.
This could lower his credit use ratio while also saving him money on interest.
However, if Louis is unable to pay off his credit card debt, there is another option for lowering his credit utilization percentage.
He has the option of applying for a new credit card or requesting a credit limit increase on his present card.
What Should You Know Before Increasing Your Credit Limit?
Before diving in, we want to share a few words of caution:
- Credit card debt is never worth it. If you don’t think you’ll be responsible with your new credit — paying on time and paying at least any new charges in full each month — you probably shouldn’t try to get a higher limit. (Seriously, those Coachella tickets can wait.)
- Only apply for a credit limit increase when it makes sense. A good time to request an increase is after you get a raise, since lenders consider your income when they set credit limits.
- Try a rewards card. If you just want to improve your credit utilization ratio, you could apply for a new card (with a signup bonus!). Then, once you earn your bonus, you can apply those funds toward your existing credit card debt to help dig yourself out of the hole. Here are some of the best credit cards for earning cash back and reward points.
- You may only get so much credit. Each credit card issuer may only be willing to extend a certain amount of credit to you, across all your accounts. So, a credit limit increase on one card could take away your ability to increase your limit on other accounts or open new accounts. This is why transferring a credit limit from one card to another might make sense.
Related: Do Millionaires Use Credit Card
How To Get Approved For Credit Limit Increase (6 Ultimate Tips)
In this article, we’ll go over both strategies for reducing your credit utilization. We will also explore the second approach, asking for a credit limit increase, in detail.
We like the credit limit increase strategy because it allows you the chance to lower your credit utilization even if you don’t have the funds to pay off your credit card balance at the moment.
And lowering your utilization, no matter how you accomplish that goal, has the potential to improve your credit scores
Are you looking for a way to boost your credit limit? First and foremost, consider why you want to increase your credit limit in the first place.
Stop right there if you want to go on a shopping binge or buy the stuff you can’t afford without credit limits.
In order for the bank to accept you, you must have demonstrated to yourself and the bank that you understand how to responsibly use credit.
This indicates that you have shown to be an excellent customer for at least 6 months.
Your chances of approval are limited to none if your credit cards are maxed out, you’ve been late with payments, or you’ve even skipped payments.
1. Wait for Automatic Credit Card Limit Increases
Many credit card companies increase your credit limit automatically, without you having to lift a finger.
If you demonstrate that you’re a responsible credit card user, and use the card enough to warrant a credit limit increase, you could get a higher credit line as frequently as every 6 or 12 months.
You can increase your odds of getting an automatic credit limit increase by:
- Building a positive payment history, never making late payments, and never causing payments to be returned.
- Using the card frequently, which generates swipe fees for the bank. If you don’t use the card often, you likely won’t be offered a credit limit increase.
Luckily, automatic increases won’t generate a hard inquiry on your credit report, as you must agree to those beforehand
2. Apply for a New Card with a Higher Credit Limit
Because each unique card can have its own credit limit cap depending on its target demographic, applying for a new card is sometimes the simplest alternative.
You can either apply for a new card with your current lender and, once approved, reallocate a portion of your new credit line to the card you originally wanted to be increased, or you can apply for a new card with your current lender and, once approved, reallocate a portion of your new credit line to the card you originally wanted to be increased.
Yes, you may do this if you have above-average credit, and it can net you a lot more money than you originally asked for.
3. Pick an Existing Card to Request an Increase On
Choose a card in your wallet for which you wish the limit raised.
Don’t assume that by contacting all of your creditors, you’ll have a better chance of getting accepted.
The issuer will need to pull your credit history to see if you’re creditworthy when you request a raise.
This credit check will appear on your credit record and will reduce your credit score marginally.
It won’t be as minor if numerous issuers are pulling your report.
Not only that, but issuers will be able to see that other issuers are also looking into you, making you appear eager for cash.
This is a big red flag for credit companies, and it can significantly impair your chances of getting approved.
Many credit card companies allow cardholders to request a credit limit increase through the internet.
Sign in to your account and look for a request submission option. It’s possible that you’ll need to amend your income details.
A higher-income may suggest stronger financial stability, which issuers may take into account when reviewing your application.
However, keep in mind that requesting a credit card limit increase will almost always result in a hard inquiry on your credit reports.
After all, you’re being considered for a greater line of credit by the lender. As a result, the procedure is comparable to that of applying for a credit card.
Although a hard inquiry may reduce your credit scores significantly (though not always), the benefits of a greater credit limit frequently outweigh any negative effects in the long term.
(Remember how we talked about the credit usage ratio earlier?) Hard inquiries will also only have a one-year impact on your FICO credit ratings. The hard queries will also vanish from your credit reports after two years.
Your card issuer may seek your annual income or monthly housing payment when you request a credit limit increase. That information can be used to assess your risk as a borrower.
Then, your issuer will make one of three decisions:
- Agree to your credit limit increase request
- Counteroffer with a credit limit increase for a lesser amount
- Deny your request for a credit limit increase
In the case of a denial, you’ll usually have to wait a while before trying again. In the meantime, make sure you keep your payment history spotless and continue to use the card often and responsibly.
If you really want to improve your credit utilization ratio, you can also try applying for a new card as explained above
Remember: Banks like to loan to people who don’t really need money. This leads us to our next tip:
3. Plead Your Case, But Don’t be Desperate
If you call the credit issuer crying that you have an emergency and think your sob story will make them empathize with your situation and increase your credit limit — think again.
Don’t tell them why you need it, tell them why you deserve it. Here are some good reasons why:
- You’ve been a loyal customer for X years/months and have never missed a payment. (Don’t ask for an increase if you’ve been a customer for less than six months.)
- You pay your balance in full each month or
- You always pay more than the minimum balance
- You’re utilizing 30% or less of your current limit
- Your payments are always on time
- Your income has recently increased
And remember, being kind to the person on the other end of the phone can also help — they’re just doing their job, so don’t take your financial frustration out on them. Not only will being rude be unlikely to help your case but yelling or cursing at a representative can give them the right to hang up on you, guilt-free.
4. Don’t Be Greedy When Requesting an Increase
Requesting too much of a raise can be considered as yet another red signal, resulting in your application being declined and you having to wait a few more months to reapply.
Also, don’t ask the representative how much money you should ask for. Employees of credit card firms are not allowed to give you this advise. There’s a loose rule of thumb that says 10 to 25% is a fair proportion to aim for, so if you have a $1,000 limit, anticipate an extra $250 or so to be made accessible to you.
5. Entice Them with a Balance Transfer
Banks love balance transfers like Joanie loves Chachi. If you don’t know how balance transfers work, all it means is you’re transferring your balance from one credit card to another.
Many credit issuers now offer 0 percent interest on transfers for up to a year or longer, which can be a really good deal. If you transfer your balance from Card A to Card B, you will no longer be charged interest for that time period. In terms of money, it’s actually a wise decision. You could save hundreds of dollars by doing so.
So what’s in it for them?
- A balance transfer fee. Check if there is one and the amount to see if it’s worth it. If the fee equals the same amount you’d save, it’s not such a sweet deal after all.
- If you don’t pay the amount in full by the time the no-interest period is over, the new issuer gets to make the money from the interest they’re now charging you that would have gone to your previous issuer.
If you tell your issuer you want an increase so you can transfer your balance, they’ll likely want to make this work, assuming they can trust you to make the payments (i.e., having a decent credit history).
6. Wait for an Increase to Occur Naturally
Credit issuers review accounts generally every six months, and those in good standings will naturally receive limit hikes periodically.
Continue to be a good customer by always making payments on time, and if you can swing it, pay the balance in full each month. Be patient, grasshopper — good things come to those who wait!
Frequently Asked Question.
How Do I Increase My Credit Limit Online?
When you’re ready to request a credit limit increase, your online account should be your first stop. While every card issuer is different, you may be able to follow these basic steps to make your request.
- Log in to your credit card account
- Find the “Credit Limit Increase Request” link or section
- Fill in all of the requested information
Depending on your card issuer and request, you could be approved or denied immediately. For larger increases, it could take several days to process your request. If you card issuer needs time to process your request, it will notify you of its decision either through an online message or mailed letter.
Related: Credit Card Hacks to Make Money
How Do I Increase My Credit Limit Over the Phone?
If you can’t request an increase online (or would prefer to plead your case over the phone), prepare to share the following information with the customer service representative:
- Address and Social Security number
- Current employment status
- Total monthly and annual gross income
- Monthly mortgage or rental payments
- Amount of requested credit limit increase
Most importantly, you may need to outline why you deserve a high limit. (The fact you take your grandma to dinner every week is nice, but probably won’t work in this situation.)
Qualifying reasons could include a history of on-time payments, frequent use of the card, an improved credit score, an increase in income, or plans to make a balance transfer to the account.
Once you have all of your information together, it’s time to make the call.
- Dial the number on the back of your credit card
- Tell the customer service representative you’d like to request a credit limit increase. You may be transferred to a different representative in a credit risk department.
- Request your increase in a courteous manner. Remember that credit card issuers aren’t obligated to say yes.
- The issuer may accept, counter, or deny your request immediately, or say you’ll need to wait for an online notification or letter.
How Large of a Credit Limit Increase Should I Request?
One thing to keep in mind is that based only on your account history, the agent may only be able to extend your credit limit by a limited amount. Increased credit limits, on the other hand, will almost certainly necessitate a hard query on your credit record.
If you’re not afraid of a hard inquiry, start by seeking a credit limit that’s twice as large as your existing credit line. If you’re denied instead of getting a counteroffer, it’s possible that you asked for too much for that particular credit card business and your existing credit situation. Request a lower amount the next time.
You should also consider your own spending patterns. What is the maximum credit limit you can responsibly handle?
Do you frequently carry a credit card balance? If that’s the case, you might want to avoid asking for a credit limit increase at all. Instead, focusing on paying your account in full each month may be a better option. It’s not worth it to raise your credit line if it means you’ll have to pay more in fees, interest, and minimum payments.
Should I Request a Credit Increase on My Credit Cards One at a Time or All at Once?
What a great question! However, this is another one of those “it depends” scenarios.
The more credit limit requests you make, the harder inquiries your credit reports will contain. These inquiries may lower your credit ratings in the short term if you hold a lot of credit cards. They may also prevent you from getting new cards, as some issuers refuse applicants who have received too many inquiries in the previous two years.
However, if you are successful in obtaining greater credit limits on numerous cards, your credit utilization ratio should decrease and your credit score may improve. After two years, any hard queries that you agreed to will be removed from your credit reports. This strategy can be a smart place to start if you have a few frequently used cards with modest limits.
Requesting raises for your cards one at a time, perhaps once every several months is another option.
This strategy allows you to gradually increase your credit limits while spreading out the hard inquiries. Although your credit limits may climb more slowly than with the first strategy, the immediate impact on your credit scores may be less severe.
In the end, you will need to evaluate the pros and cons and choose the approach that works best for your situation.
Can I Transfer My Credit Limit?
Don’t give up if you’re denied a credit limit increase. Another option is to apply for a new credit card from the same issuer and then transfer a portion of your new credit line to your existing credit card if approved.
You’ll need to contact customer support to transfer your new credit line to the original card. Your credit limit transfer may be granted right away, or you may have to wait days or weeks, depending on the issuer.
If you already have two credit cards from the same company, you can request that a portion of your credit limit be transferred from one to the other.
Consider the following scenario: you have two Chase cards, one with a $10,000 limit and the other with a $20,000 limit. You might request a $5,000 credit line transfer from your second card to your first card, giving both cards a total credit limit of $15,000. You might have greater luck with this technique because you’re not seeking for extra credit; instead, you’re only asking to transfer your current credit around.
Remember that transferring a portion of your credit limit from one card to another will not reduce your overall credit utilization ratio. However, it has the potential to reduce your account utilization ratio.
How To Get Approved For Credit Limit Increase: Wrapping Up
You’re now ready to ask for the credit limit increase you’ve earned as a loyal customer.
Recognize that a greater limit can easily encourage you to charge more, leading to a potentially disastrous situation. Don’t alter your spending patterns based on a fictitious rise in money. Continue to utilize credit only in an emergency or if you know you’ll be able to pay off the bill in full each month, and maintain your credit usage ratio below 30%.
Following those principles will go a long way toward keeping your credit score in good shape.
Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.