Should You Request a Credit Card Limit Increase?

Requesting a credit card limit increase can impact your credit score, help you pay for big and/or unexpected expenses, and more. It can also make it easy to fall into debt, though, so you should thoughtfully consider whether it's the right choice for you.

This article explains when you should and shouldn't ask for a credit increase, how to ask for it, what to do if your request is denied, and much more. Hopefully, this information will help empower you to make a smart decision.

Should you ask for a credit card limit increase?

At first, it may seem like a no-brainer to increase your credit limit. It can boost your credit score, prepare you for emergencies, make it easier to get the best possible terms on a car loan or mortgage, and allow you to make large purchases.

On the other hand, more credit means a higher potential for more debt. If you're already struggling with paying off your debt, or if you don't trust yourself with more credit, it's wise to leave your credit limit as-is for now.

Alternatives to a credit card limit increase

Reaching out to your credit card issuer to ask for a credit limit increase is just one way to access the funds you need. Instead, you could focus on paying down your balance, open a new card, try a balance transfer, or open a line of credit.

• Pay down your existing credit card debt: Making credit card payments and reducing your overall balance can require some work, but as you pay down your balance, you're opening up access to credit. Remember, this also helps your credit score.
• Open a new credit card: If you're in the market for a new credit card that's a better fit with your spending habits, you'll get access to new credit. If you're trying to increase your credit limit to improve your score, don't close older cards that you're no longer using, since this affects the overall age of your accounts and reduces your credit limit.
• Do a balance transfer: Keep your eyes open for great balance transfer offers, which give you a limited period of time to pay no or low interest. If you do a balance transfer and have a higher limit, this gives you some spending wiggle room, but it's a really good opportunity to pay down your debt.
• Request a line of credit: Talk to your current bank or credit card issuer and ask if they can extend a line of credit that you can borrow from. Read the terms and conditions carefully, especially if you're getting a home equity line of credit.

Pros and cons of credit card limit increases

There are undeniable benefits to having access to more credit, like lowering your credit utilization, but there are a few significant drawbacks to consider, too – and overspending is a big one.

Credit card limit increase benefits

• You can use the higher credit limit in case of emergencies: You should have a separate emergency savings fund, but a higher credit card limit can offer peace of mind while you build one.
• You can make larger purchases (and earn more rewards): If you know you have to make a large purchase soon, and your current credit limit can't handle it, you could consider increasing your credit limit for it. That way, you can accumulate a pretty sizable number of reward points in a single transaction.
• Increasing your credit limit reduces your credit utilization: Lenders want to see that you're responsible with credit, which means a low credit utilization ratio (ideally under 30%). To find your credit utilization ratio, divide your total balance by your available credit.

(Total credit balance / Total credit available) * 100 = Credit utilization %

Credit card limit increase downsides

• You may be tempted to spend more: If you often find yourself maxing out your card, a higher credit limit can make it more difficult to be disciplined with your spending. You may find that a higher limit pushes you into credit card debt.
• Your credit score can take a hit: If your credit card issuer runs a hard credit check before increasing your credit limit, your score could drop a few points. This isn't a huge deal if you rarely request credit increases, but if you're frequently applying for credit, you could really damage your score.
• You could hurt your chances of getting other types of credit: You may want to wait to request a credit limit increase if you're shopping around for a mortgage or auto loan. Lenders get worried when they see you applying for multiple new credit products.

How to increase your credit limit

Often, your bank will contact you to ask whether you want to increase your credit limit, and in this case, all you have to do is say yes. You may find the offer in your email or when you log in to your online banking portal.

If the bank hasn't reached out to you, you're also free to request a credit limit increase, via telephone, online, or in person. You'll usually have to update your income information and list your monthly debts, so your lender can determine how much more credit you can comfortably handle.

You can also try upgrading your credit card if your credit score is good enough and you meet all the requirements. For example, if you took out a basic credit card but improved your credit score significantly, you could upgrade to a premium card with a higher limit.

When should I ask for a credit limit increase?

If your finances are in good shape and you need more credit, it's a good time to ask for an increase. It can also be helpful if you're planning a trip or making a big purchase.

You might also want to increase your credit limit if you're trying to build your credit score.

As for how often you can apply, Scotiabank advises waiting between 4 months – 1 year after requesting a credit limit increase before applying again.

What happens if your credit limit increase request is denied?

When you request a credit limit increase, your credit card issuer looks at your income, total debt, and credit utilization ratio. If your credit score is too low or your credit utilization ratio is too high, your request will likely be denied.

It can be disheartening when this happens, but there are steps you can take to improve your chances of getting approved next time:

• Pay down debt: This could require creating a new budget to help you prioritize which payments should be made first.
• Improve your credit score: Be sure to pay your credit card bill (and all other bills!) on time every month. Consistency also helps, so stay in the same home, at the same job, and with the same bank for as long as you can.
• Monitor your credit report: Check for any errors or potential fraud that could affect your score. You may be able to do this through your bank or with a third-party service like Credit Karma or Borrowell.
• Boost your income: Request a raise or promotion, or try a new side hustle as a means of increasing your overall income. This can help to reduce your credit utilization ratio.

Although these suggestions take time, you're improving your overall financial health, which is definitely a good thing.

Should you accept pre-approved credit limit increases?

The short answer is yes, you should accept a pre-approved credit limit increase.

Accepting one shouldn't affect your score, which is a main concern for those applying for credit. As long as you continue to use your credit responsibly, a credit increase can only be a good thing.

Keep in mind, though, that lenders won't pre-approve you for a credit increase if your card is maxed out or you frequently miss payments. Therefore, if you're offered a pre-approved credit increase, chances are you can handle it.

FAQ

Is it good to increase my credit limit?

If you know you can handle the extra access to credit without maxing out your card, then a credit limit increase can improve your credit score. Many issuers automatically offer to increase your credit limit, but if it's been a while, updating your personal details might help to trigger an increase.

Is it hard to get a credit card limit increase?

It isn't necessarily difficult to get a credit limit increase if your credit card account is already in good standing and it's not maxed out. Your chances are also better if you have a solid credit score and can show high income.

Can you tell me how to increase my credit card limit?

You can contact your credit card issuer by phone, in person, or online to request a credit card limit increase. They'll usually ask for your employment details and want updated income information. Then, they'll check your credit score to help them decide whether or not to approve your request.

Should I accept a credit limit increase?

If your credit card issuer has pre-approved you for a credit limit increase, your account is probably in good standing and not maxed out. In this case, it's a good idea to accept the increase since you'll have more access to credit and your credit score should see a little boost.

How do I get a Capital One credit card limit increase?

Capital One Canada is proactive about identifying when you're eligible for a credit card limit increase, so you'll be notified if you're eligible. You can also call customer service or sign in to your online account to see if a credit limit increase offer is available.

Is a $30,000 credit limit good?

41% of Canadians have a credit card limit of $10,000 or higher. A $30,000 credit limit is definitely considered good. When you're figuring out your credit limit, remember to add the limits from every credit card account you have.