Asking for a credit limit increase can be necessary when times are tough and your credit limit doesn't fit your increased spending habits. Many Americans are facing financial hardship due to the ongoing coronavirus pandemic, and requesting a credit limit increase can help ease the burden of stocking up on groceries and other essentials.
But before you ask your card issuer for a credit limit increase, you should consider what potential affect a higher credit limit could have on your credit score and whether an increase will really help your financial situation or only hurt it.
Below, CNBC Select reviews when you should ask for a credit limit increase, how a credit limit increase affects your credit score and the ways to request a credit limit increase.
When is the best time to ask for a credit limit increase?
When you're approved for a credit card, your card issuer will assign you a credit limit. This amount can be anywhere from a couple hundred dollars to tens of thousands of dollars. As the length of time you've had the card increases, typically so will your credit limit. These increases may occur automatically, as prompted by your card issuer.
But there are instances, such as the coronavirus pandemic, that may spur you to ask for a credit limit increase sooner than waiting for an automatic notice.
However you should only ask for a credit limit increase if you're confident that you won't overspend. Any purchases made on your card that aren't paid off by the due date will incur the regular APR, unless you're taking advantage of a 0% APR period. (Learn how 0% APR credit cards work.)
Here are some of the best times to ask for a credit limit increase:
- When you have good credit: If you have good credit (scores 670 to 739) or excellent credit (scores 740 and greater), that signifies you're responsibly managing your credit. This signals to your card issuer that you can likely handle an increased credit limit.
- When you get a raise: If you recently got a raise, this can be a great time to update the income listed on your credit card account, which may result in an automatic credit line increase within a few months. You can also request a credit limit increase and enter your new income. This shows the lender you have the ability to afford more expenses.
- When your spending habits change: Major events, such as marriage, buying a house or starting a family, can drastically alter your spending habits. You may incur more expenses from grocery shopping for your family or purchasing furniture for your home that require an increased credit limit.
When is the worst time to ask for a credit limit increase?
While you may jump at the chance to ask for a credit limit increase if you're strapped for cash, it may be wiser to hold off. Credit limit increases aren't risk-free. You could see a ding in your score if your card issuer pulls your credit report to verify if they should approve a credit limit increase or not.
To play it safe —here are some of the worst times to ask for a credit limit increase:
- When you have bad credit: If your credit is bad (scores below 580), there's a slim chance you'll be approved for an increased credit limit. And if you ask for a credit limit increase that results in a hard pull of your credit, it can ding your score further. A better option is to build your credit and ask for an increase when you have a good credit score.
- When your income has decreased: A recent layoff, demotion or job switch that resulted in a lower income can hurt your chances of receiving a credit limit increase.
- When you maxed out your card: If you're already nearing your current credit limit and carrying a balance month to month, you're not in the best position to ask for more money. Consider paying off debt first.
- When you just opened the card or requested a credit limit increase: Many card issuers require you to wait at least three months after account opening before requesting a credit limit increase. And you may have to wait six months between credit limit increase requests, such as with Citi cards, like the Citi Double Cash® Card. (see rates and fees.)
How to ask for a credit limit increase
Credit limit increases can happen automatically with no action on your part, or by your request. Automatic credit limit increases may happen annually or if your card issuer notices you recently updated your income.
If you want to ask for a credit limit increase, it can typically be done in one of two ways: online or over the phone. Online requests can be done via your card issuer's mobile app or by logging into your online account. For instance, if you have the Chase Sapphire Preferred® Card, Chase's website states you can "sign in to get an instant decision on your credit line increase request."
You can also call your card issuer to discuss an increase and provide your reasoning why. This can be a good idea if you don't have increased income but want to explain your need for more credit and provide reassurance that you can repay it.
When it comes time to make the credit limit increase, make sure you have the following handy:
- Annual income
- Employment status
- Monthly housing payments (rent or mortgage)
- In some cases, you can also provide a new suggested credit limit
In most cases, you can expect to receive an instant decision on whether you're approved for a higher credit limit increase, or denied. If you're approved for an increased credit limit, make sure you don't misuse the increased buying power. Continue to make payments on time and in full.
Don't miss:What happens if you try to spend more than your credit limit
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
FAQs
You should explain why you think you deserve a higher credit limit, says Lohrenz. If your credit score has increased since you opened the card, point that out. “You should also mention if you've had an increase in your financial means since you opened the account,” she says.
What should I say when asking for a credit limit increase? ›
You should explain why you think you deserve a higher credit limit, says Lohrenz. If your credit score has increased since you opened the card, point that out. “You should also mention if you've had an increase in your financial means since you opened the account,” she says.
When to request a credit limit increase? ›
You may be a good candidate for a credit limit increase if you've recently received a raise or changed to a job with a higher salary. You might also qualify if you have a history of making full, on-time payments to your account, as this sort of behavior demonstrates that you are a responsible borrower.
Does it hurt my credit score to ask for a limit increase? ›
Requesting a credit limit increase on its own shouldn't affect your credit scores. But the type of credit inquiry your credit card issuer uses to evaluate your request could. Generally, your lender will review your credit history when deciding whether to approve your credit limit increase request.
How high of a credit limit should I request? ›
There's no magic amount of credit that a person “should” have. Take as much credit as you're offered, try to keep your credit usage below 30 percent of your available credit and pay off your balances regularly. With responsible use and better credit card habits, you can maintain a good credit score.
How do I trigger a credit limit increase? ›
On-time payments, longer credit history and paying down other debts will all improve your credit. Making timely mortgage payments, paying off other debt or reducing the principal on your car loan, your credit score is likely to improve. And higher credit scores may trigger a credit limit increase.
What is a reasonable credit card limit increase? ›
Bear in mind that you may not get the full amount requested, and have a contingency plan in place. Typically, the bank will consider increases from 10% to 25% of your current limit. Anything higher could trigger a hard inquiry on your credit report, and that can in turn lower your credit score.
How to justify a credit limit increase? ›
3 Reason to request a credit limit increase
- You regularly spend a large portion of your income. ...
- Your credit score is much higher than when you first opened the card. ...
- You're making more money. ...
- You've been sloppy with your account. ...
- You just received your credit card. ...
- You're carrying a large balance and want to spend more.
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.
What are the disadvantages of increasing credit limit? ›
If your total credit limit is fairly high relative to your income, it may affect your ability to be approved for a loan. Potential for greater debt. When you have access to a larger credit limit, there's the potential for greater debt to accumulate. You'll need to be diligent about spending within your means.
If the credit increase is not automatic and you actively request it, expect your lender to conduct a hard credit inquiry. While this could temporarily lower your score by a few points, likely no more than 10, the effect is generally short-lived.
Is it a good idea to increase credit limit? ›
Increasing your credit card limit can help you boost your credit score, but it can also hurt it. Remember to look at things like your credit mix, utilization ratio and other criteria we mentioned above before applying for a credit limit increase.
What is the credit limit for credit one up to $2000? ›
Credit One Platinum's maximum credit limit is around $2,000, according to customer reviews. Some people report being approved for this amount right away, while others have worked up to it over years of responsible card use. The minimum credit limit for Credit One Platinum is just $300.
What is a respectable credit limit? ›
If you're just starting out, a good credit limit for your first card might be around $1,000. If you have built up a solid credit history, a steady income and a good credit score, your credit limit may increase to $5,000 or $10,000 or more — plenty of credit to ensure you can purchase big ticket items.
Is $2500 a good credit limit? ›
A $2,500 credit limit is good if you have fair to good credit, as it is well above the lowest limits on the market but still far below the highest. The average credit card limit overall is around $13,000. You typically need good or excellent credit, a high income and little to no existing debt to get a limit that high.
When should you request a credit line increase? ›
If you haven't missed any payments, you have paid off your other credit cards or you have had an increase in income, you could ask your credit card company to increase your credit limit.
How to request for an increase in credit limit? ›
3 ways to request a credit limit increase
- 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. ...
- Call your credit card company. ...
- Open an entirely new credit card.
Although a credit limit increase is generally good for your credit, requesting one could temporarily ding your score. That's because credit card issuers will sometimes perform a hard pull on your credit to verify you meet their standards for the higher limit.
How to ask for a credit increase credit one? ›
In order to submit a request with Credit One Bank, log in to your account and go to “Settings,” then choose “Credit Line Increase.” You will be prompted to enter your personal information and desired limit increase before you submit your request.
Does getting denied credit increase hurt score? ›
Does Asking for a Credit Limit Increase Affect Your Credit Score? That can depend on your credit card issuer. If it does what's known as a soft credit check, it will not affect your credit score in any way. If the company makes a hard credit check, that may lower your score a bit, but usually only temporarily.
