There are four ways to increase your credit limit on a credit card. They include requesting a higher limit from your credit card’s issuer, waiting for your credit card company to automatically raise your credit limit, adding to a secured credit card’s security deposit, and applying for a new credit card account.
Which option you choose depends on what type of credit card you have and whether you’re looking for more spending power or a higher limit for credit-improvement purposes. One complicating factor is that each credit limit increase request can cause a small, short-term drop in your credit score. So, you need to be careful. With that in mind, we’ll help guide you through your options below.
How to Increase Your Credit Limit
Request a Higher Credit Limit Online
Log in to your credit card company’s website, pull up your account’s main menu and look for the option to ask for a higher limit. Then, answer the questions about your income, expenses and desired credit limit, and submit the request. This option is best with unsecured credit cards that have been open for at least six months, with consistently on-time payments. There may be a hard inquiry into your credit history when the credit card company evaluates your request.
Wait for an Automatic Credit Limit Increase
Credit card companies evaluate existing accounts on a monthly basis, usually beginning once an account has been open for five or six months. If you pay your bill on time every month, you may automatically receive a higher limit. This option is more of a happy surprise than something you can count on.
Add to a Secured Credit Card’s Security Deposit
Secured cards require users to place a refundable security deposit. The amount of the deposit becomes a card’s credit limit. And you can increase your limit by simply adding to your deposit. This option doesn’t let you borrow more, but it may help your credit score improve faster.
Apply for a New Credit Card Account
Opening a new credit card account will likely increase your overall spending power more than requesting a higher credit limit on an existing card. You may even get some extra perks in the process, such as a rewards bonus or a 0% introductory APR. This option is best for people whose credit scores have improved since the last time they applied for a credit card. You can check your latest credit score for free on WalletHub.
Credit Limit Increase Policies by Major Credit Card Company
|Credit Card Issuer||Rules for Automatic Increase||How to Request a Credit Limit Increase|
|American Express||Account must be open for at least 60 days with a history of on-time payments||Online or call 1-800-528-4800|
|Bank of America||At least six consecutive months of on-time payments||Online or call (800) 732-9194|
|Barclaycard||At least six consecutive months of on-time payments||Online or call 1-866-928-8598|
|Capital One||At least six consecutive months of on-time payments||Online or call the number on the back of your card|
|Chase||At least six consecutive months of on-time payments||Call (800) 432-3117|
|Citibank||Account must be open for at least six months||Online, through the Citi Mobile app, or by phone at (800) 950-5114|
|Discover||At least six consecutive months of on-time payments||Online or call 1-800-347-2683|
|Wells Fargo||Account must be open for at least six months||Call (800) 642-4720|
|U.S. Bank||At least six consecutive months of on-time payments, reduce your outstanding debt, and update the income U.S. Bank has on file||Online, through the mobile app, or by phone at (800) 285-8585|
Benefits of a Higher Credit Limit
- More Available Credit & Lower Utilization: The more available credit you have, the better, considering that credit utilization is a major component of the amounts owed section of your credit score, which accounts for about 30% of your total score. Credit utilization is calculated for each of your cards individually as well as for all of your cards in combination. Having more credit available will decrease your overall utilization as well as the individual ratios of currently tapped out cards you get an increase on. It will also signal to lenders that you are a trustworthy borrower.
- Added Spending Power: A higher credit limit obviously enables you to spend more money. This may be a blessing for some, who perhaps need to finance car repairs or pay medical bills.
- Minimal Credit Score Impact: Requesting and receiving a credit line increase is less detrimental to your credit standing than applying for and opening a new credit card. Yes, requesting a credit line increase will likely result in a hard credit pull, but the damage won’t be too severe. Using the higher credit limit responsibly will also lead to credit score gains.
Disadvantages of a Higher Credit Limit
- More Debt Potential: U.S. consumers owe more than $1 trillion in credit card debt. We obviously have an overspending issue, and that clearly illustrates the danger inherent with a credit limit increase. Used irresponsibly, the added spending power could wind up representing the rope needed to hang your finances.
- Inability to Get Other Loans & Lines: The more credit you already have at your disposal, the less likely another financial institution will be to extend you additional credit in the future. Your income and assets only enable you to support so much debt, after all, which means that a higher credit limit could make you less lendable moving forward.
How Credit Card Limits Are Set
Credit card companies all do things a bit differently, but most base their credit limits on the same overall factors.
- Credit History & Disposable Income: The more disposable income you have and the longer your track record of financial responsibility is, the higher your spending limit will likely be.
- Economic Climate: If the economic outlook is gloomy, credit card companies are much more likely to be conservative in their credit offers to all of their customers. In these cases, even if your credit score has risen, you might not be granted additional credit.
- Security Deposit: The security deposit on a secured credit card is typically equal to the credit limit. To increase your credit limit, you can deposit more funds.
- No Preset Spending Limit: Another segment of the credit card market never actually discloses exact spending limits, even once your account is active. No Preset Spending Limit credit cards and charge cards – which some consumers mistake to be limitless – have dynamic spending limits that are established on a monthly basis.
To learn more, check out WalletHub’s guide on how credit limits are determined.