Ultimate Guide on How to Increase Your Credit Card Limit [In 2021]

Depending on how much debt you’re in, increasing your credit limit can either be helpful or harmful. If you are financially disciplined and you pay your bills on time increasing your credit limit can give you more flexibility. That’s why we’ve provided a short guide on how to increase your credit card limit so you can decide whether it’s the best decision for you.

Find out more about:

  • why you should increase your credit card limit
  • what banks take into consideration when you apply for an increase
  • the pros and cons when you increase your credit

Reasons to Request an Increase of Your Credit Limit

There are plenty of reasons why people choose to increase their credit limit. Here are some of them:

If you really need it

Is your limit too low to make larger purchases? Or perhaps you’re struggling financially and need extra cash to see you through the month? Whatever your reason is, you should opt for a credit limit increase if you really need it. Request to increase credit limit if you need the funds to do something important such as buy equipment for a project or food for the month.

If it helps your credit score

Another reason to increase your credit line is if you want to improve your credit score. Your credit score is made up of five components. These components are your payment history, the amount that you still owe, length of your credit history, types of credit in use, and any new credit you have. Some people want to lower their credit utilization and you can do this by paying down your balance or increasing your line of credit.

If you can afford it

Increasing your limit means having to pay back more money on your card. You should only choose the request credit increase option if you can afford to make repayments every month.

How to Increase Your Credit Limit 

There are a couple of ways on how to increase your credit line. Each of these options has its advantages and disadvantages. Take a look at the credit limit increase options in this next section:

Automatic Credit Limit Increase

An automatic credit limit increase is an option you have when you sign up for a credit card. Some lenders review your account every six months. If you manage your account effectively each month and you don’t have bad credit, the lender may do an automatic increase of your credit limit.

If you want the lender to increase your limit automatically, make sure you pay your balance every month. This way you possibly won’t even have to fill in forms and get a credit history check.

Requested Credit Limit Increase

If the lender doesn’t increase your credit limit automatically then you may have to apply for a credit limit increase by asking. To ensure that you get approved for a credit limit increase you must ensure that you repay dues on time and that you have a positive credit score.

So, are you still wondering how to ask for a credit limit increase? There are two ways:

  • Request online directly from your account: Some lenders will have online services where you can apply online for your credit increase. This is an ideal option if you’re not in a rush because it can take a few days to process. You should determine the credit limit before applying so you can calculate costs and any interest rates you may have to pay.
  • Apply on the phone: If you want a faster response you can apply for your credit increase by phoning the lender. If you’ve been approved, the lender will transfer credit to your account.

Apply for a New Credit Card

If you’ve managed your finances effectively, then the best way to increase your credit card limit is to apply for a new card. Simply get a new card that has a higher credit limit. Only do this if you can afford to, however.

What do Banks Take Into Consideration When Reviewing Your Request for a Credit Limit Increase? 

Current credit limit

Whether you want a temporary credit limit increase or a permanent one, a lender will typically look at a card user’s current credit limit. The lender will look at your current debt-to-income ratio before considering whether you should be approved.

Credit score

Lenders will check your credit score to see if you can handle more debt. You should build a credit score before applying to increase your chances of approval.

Credit utilization ratio

If you have a high credit utilization score you may not get approved for a credit increase. Your credit utilization is your balance compared to your limit. For a low credit utilization ratio, you must pay more of your balance so that it doesn’t exceed your limit.

Credit history

Depending on whether you increase your credit limit or apply for a new card a lender will either do a soft pull or a hard pull of your credit history.

Reasons Why Your Request for a Credit Limit Increase Can Be Denied 

There are some situations where your request might get declined when you request a credit limit increase such as if you have a secured card or if you have a low income. Find out more about these reasons below.

You Have a Secured Credit Card

Learn more about secured vs unsecured credit cards and what is the difference. This will help you understand the advantages and disadvantages of these types of cards. One of the drawbacks to having a secured credit card is that you may be rejected when you apply for a credit limit increase.

You may get a credit increase under certain conditions but it will depend on the credit card issuer’s policy. Some of the best secured credit card companies may increase your credit limit in six months of being a holder without a credit limit increase fee.

If the company doesn’t offer credit increases on your secured card then try to switch to an unsecured credit card to increase your limit.

Negative Credit History

Checking your credit history is a way for lenders to see if you’re going to be a liability or not. You may get rejected for a credit limit increase if you have multiple cards that you’re paying off and a high credit balance.

On the other hand, there are ways on how it is possible to increase your credit card limit without a hard pull on your credit history or simply make sure that you have a high credit score.

Low Income

Your credit limit is often linked to the amount of money you earn each month. If your income is too low for the credit needed, your request will be denied. You may have to find a way to increase your income by asking for a raise or applying for a higher-paying job.

Adverse Action Letter

An adverse action letter or notice is a way to inform you that you have been denied employment, insurance, and other benefits such as a credit limit increase. The letter will indicate what credit reporting agency was used to check your history and how to contact them.

This document will provide information as to why you were rejected for a credit card limit increase. Use this information to improve your credit score so you can reapply for an increase in the future.

Other Important Aspects

There are other important aspects to consider when you request a credit card limit increase such as fees and ways to get a maximum credit score so you can get approved. Take a look at this next section below to find out more.

Credit Limit Increase Fees 

You must be aware that some credit card issuers may charge a fee when increasing your credit card limit. There are some companies that may charge you a certain percentage of the increase each time you’re approved.

Experts suggest that instead of increasing your limit you should opt for the best zero annual fee credit cards on the market so that you don’t have to pay APR. Or you could opt for cards that offer cashback rewards so you can have extra funds for purchases.

Transfer an Amount of Credit Line between Credit Cards 

To increase your limit on a card you can do a credit line transfer from one card to another. However, it should be noted that you can’t transfer credit between personal and business cards.

Additionally, you may only request a transfer every 30 days and each card must contain a minimum credit amount of $1,000.

One of the reasons people do a line of transfer from one card to another is because the card may have more benefits. Some people prefer to use a certain credit card because of the benefits they provide but it may not have enough limit to make a bigger purchase.

Ways to Improve

If you’ve received an adverse action letter on your request for an increase of your average credit card limit, take a look at the information as to why it was rejected. By looking at the reasons you can find ways to improve your credit history so you can get approved for an increase in the future.

One way to improve your chances of getting approved is by paying your balance and optimizing your credit utilization ratio. Approval can be as simple as paying your accounts on time and not doing anything that can destroy your credit score.

If you want to know how to check your credit card limit, you can begin by looking at your billing statements. This document will inform you what your card balance is and your available credit. Use this information to lower your card balance.

You may not have to request a credit increase if you have a card with no interest rates. Many people wonder what is a good APR on a credit card, so we’ve provided a guide on that as well.

Pros and Cons of Credit Limit Increase 

Pros

  • Improves your credit score
  • Helps in the event of an emergency
  • Makes it easier to get loans
  • Lowers credit utilization
  • May increase your credit card rewards

Cons 

  • Not ideal if you’re in heavy financial debt
  • You may have to pay credit increase fees
  • Rejection may negatively affect your credit score

Conclusion 

The best way how to increase your credit card limit is by applying online. If you want a quicker response, phone your card issuer for the best advice on how to increase your credit card limit. If you don’t want to pay for fees, take a look at the best no-interest credit cards on the market so you don’t spend more money paying off interest rates.

FAQ

When to ask for a credit increase?

You may want to ask for a credit card increase if you want to make a big purchase on a card that offers more benefits. Or on a card that has no APR fees. You can also ask for a limit increase to improve your credit score.

Is it good to increase your credit limit?

In certain situations, it can be good to increase your credit limit. You can lower your credit utilization percentage and have emergency funds when you need them.

Does requesting a credit increase affect your credit score?

Increasing your credit card limit can improve your credit score by lowering your credit utilization ratio. However, it can also negatively affect your credit score if the card issuer does a hard credit history check.

Why did my credit limit go up?

Some credit card companies automatically increase your credit limit after reviewing your account. If you’ve been making consistent payments on time you can get an automatic credit card limit increase.

How often do credit card companies increase your limit?

Some card issuers will increase your credit card limit every six months after reviewing your account without you asking them. This is one of the ways if you’re wondering how to increase your credit card limit.

List of credit card lenders that offer credit limit increase

Credit lender Credit increase Hard pull/soft pull check Credit limit increase fee Minimum credit score for credit limit increase
Mercury Automatic Soft $10 575
Citi Bank Online/automatic Hard 2.5% of the increased amount 660+
Surge Online/automatic Soft 5% of the increased amount 300
Avant Online/by phone Hard $10 850
Chase By phone Hard $10 600
Mission Lane Automatic Soft $10 300
Capital One Online Hard $10 580
Bank of America Online/by Phone Hard $10 620
Discover Online Soft $10 680
Walmart Online/by phone Soft $10 620

ABOUT AUTHOR

Proudly South African, I have a history in psychology, as well as administration, but writing is my first love. I've been a full time copywriter for four years and create SEO friendly blogs, case studies, web content, landing pages, reviews, whitepapers and more. I cover many topics but especially enjoy writing about digital marketing, healthy living (body and mind) as well as some technical niches.

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