A credit limit, also known as a credit access line or credit line, is the maximum amount of dollars you can spend on your credit card before having to pay off some of the balance. Depending on the credit card and how financially stable you are, credit limits can range from a few hundred dollars to tens of thousands of dollars.
Being smart about how you use your credit card — and paying your bill on time and in full each billing cycle — can help increase your credit limit and may improve your credit score. However, on the other hand, a higher credit limit can lead to overspending.
It's important to keep in mind the following considerations when it comes to how your credit limit affects your credit score, how to ask for an increase and questions to ask yourself before doing so.
How to request a credit limit increase
Depending on your credit card issuer, you have a few options for requesting a higher credit limit.
- Make a request online. Many credit issuers allow cardmembers to request a credit limit increase online through their website or user portal. Sign in to your account and submit a request. In some cases, you may have to update your information, such as your annual income.
- Call your credit card company. The back of your card has a customer service number you can call and learn if you're eligible for an increased limit. You may have to answer some questions regarding your request and financial situation, but if you meet the requirements they can put in a request for you. Once submitted, you may receive a decision immediately, or you may have to wait up to 30 days before receiving an answer.
Sometimes, your credit card issuer may automatically increase your credit limit based on certain factors such as having the card open for a long period of time and making payments on time. If this happens, they may send you communication that your limit has increased, so be sure to monitor for these notifications. With some issuers, this may happen even every 6 or 12 months.
How to be eligible for a credit limit increase
There are a few key factors your credit card company will look at when considering your eligibility for a credit limit increase. They will want to know if:
- You make on-time payments
- You make more than the minimum monthly payments or pay off your balance in full
Other factors that creditors may consider include:
- Whether you recently had changes to your income
- Your credit score
- Whether you've ever maxed out your credit card
- Your credit utilization ratio
- How long you've had the card open for (some creditors have limitations, like requiring the card to have been open for six months or one year before you're eligible for an increase)
What to consider before requesting a higher credit limit
Being approved for an increased credit limit gives you more money at hand to spend on what you need, but it also comes with a larger responsibility. Here are a few key things to consider before you request an increased limit.
- When you request a credit limit increase, this may result in a hard inquiry on your credit report if the lender obtains a copy of your credit score. But in some cases, a request may result in a soft inquiry, depending on your credit card issuer.
- Ask yourself if you'll still be able to make payments on time and pay off your card in full, if you have a higher credit limit and spend more each month. If the answer is no, now may not be the best time for an increase.
- Also, consider your credit utilization ratio. If you have a higher credit limit and spend more each month, your utilization ratio could be higher, which could negatively affect your credit score.
Tips for requesting a credit limit increase
Card issuers are not obligated to approve your request, so here are a few tips to help the request process go smoother.
- When you request a credit limit increase, it's important to have the information you'll need ready. Typically, you'll need to provide your total annual income, current employment status and monthly mortgage or rent payment. You may need to also provide the amount of the credit limit increase you're requesting.
- Be prepared to defend your request for a higher limit. The representative may ask why you need a credit limit increase and why they should grant your request. You can defend your case with information such as your history of on-time payments, frequent and responsible use of the card, a high credit score, increase of income and more.
- Request the credit limit increase at a good time. Wait until you get a raise or your annual income increases. Also, be sure you have good credit and a good track record of paying on time when applying.
How to improve your chances of being approved for more credit
If you're looking for ways to improve your chances of getting an increased credit limit, focus on the following things:
Maintain a good credit score
Consumers with good credit scores (typically FICO scores of 690 and up), are more likely to get approved for more credit. If your credit score needs a boost, focus on making on-time payments each billing cycle, keep your credit utilization rate below 30%, and keep any older credit cards you have open — which will better represent the length of your credit history.
If you're planning on requesting a credit line increase and need help keeping track of your credit score and what affects it, Chase Credit Journey® can be a helpful tool.
Reduce your outstanding debt
Even low statement balances count as debt when reported to credit bureaus. This may make a card issuer hesitant to approve you for additional credit. The bank must weigh the risk that a cardmember will default on their payments.
Here's a tip: If you pay off your balance before the end of the billing cycle, there will be no reported outstanding debt. Make sure you know the date that your billing cycle ends and if possible, pay the balance in advance of that date. Chase offers automatic payments, which ensures your bill is automatically paid on time each month.
Include all sources of income
You may be applying for additional credit because your income has recently increased. Make sure you're counting all qualifying sources of income — which banks must allow you to include when you have a reasonable expectation of having access to. This could include your spouse's or partner's income, as well as other eligible sources such as alimony, child support, investment income, disability benefits and retirement disbursem*nts.
The benefits of a higher credit card limit
There are several key benefits to having a higher credit limit.
Avoid the need to open a second card
When you have the ability to spend more on a single credit card, you avoid the need to open a second card to cover necessary expenses. Some people may find it easier to keep track of purchases this way, as well as only need to manage one credit card bill instead of multiple bills.
Earn more rewards
If you have a rewards credit card, there is more opportunity to spend and earn rewards or cash back when your credit line is higher.
Low credit utilization
A higher credit limit may result in a lower, more desirable credit utilization ratio if your spending doesn't increase accordingly. Maintaining a lower credit utilization ratio may even boost your credit score.
In conclusion
Consider whether you want to request a credit limit increase on your existing card. If you decide it's the right time to increase your limit, call the phone number on the back of your credit card.
