Quick Guide: How To Increase Credit Limit

Learning how to increase your credit limit can offer plenty of benefits, one of which could be an increase in your credit score. While many credit card issuers can automatically issue them, you can request a credit limit increase as well. Before doing so, it’s important to understand how it can impact your credit score and in what ways you can minimize potential negative effects.

How To Increase Your Credit Card Limit

There are several ways to get an increased credit limit. The first is to wait for automatic credit card limit increases, which are often granted to responsible credit card users as frequently as every 6 or 12 months. You can increase your odds of receiving an automatic credit limit increase by paying your bills on time and using your card frequently, which generates higher fees for the issuing bank.

Another way to request a credit limit increase is to directly ask your bank or credit card issuer. In most cases, you can fill out a short online request form on your account page or through a brief phone call to the issuing bank.

A credit limit is the maximum amount a cardholder can spend on their credit card. Your credit card issuer will impose a credit limit based on several factors that are based on your credit history, such as your payment history and credit utilization. The more creditworthy you appear to a credit card company, the more likely you are to be approved for a higher credit limit.

How Requesting A Higher Credit Limit Can Affect Credit Scores

Your credit limit is an important factor used to determine your credit score because it affects your credit utilization ratio, which is the percentage of the available credit you can use on any given card compared to how much you’ve spent in a given billing cycle.

A lower utilization ratio is generally better for credit scores. Requesting credit increases, however, may trigger a hard pull on your credit report from the credit bureaus. Hard pulls are noted for up to 2 years on your account and can negatively affect your credit score for up to a year, according to FICO^®.

Pros And Cons Of A Credit Limit Increase

While getting a credit limit increase may seem positive on the surface, there are some downsides as well, including affecting your credit report.

Pros

More Access To Purchasing Power

The higher your credit limit, the more you will be able to make purchases on credit. It could be helpful if you need to make a large purchase or need funds for an emergency but don’t have the time to apply for other loans, for instance.

Better Credit Utilization

Having a higher credit limit can benefit your credit utilization ratio. That means even if your credit card spending is the same, your credit utilization can go down, helping to boost your score. It can also mean you have a higher spending threshold before you start seeing negative effects on your credit score.

Cons

The Potential To Lower Your Credit Score

Some credit card companies will conduct a hard inquiry when you request a credit limit increase, which could hurt your score in the short term. A hard credit inquiry will show up on your credit report, though if you already have a high credit score, there may be minimal impacts.

Less Likelihood Of Getting Other Credit

If you frequently request credit limit increases, it could impact the likelihood of getting other forms of credit. Aside from new credit cards, other loans like auto loans may be harder too. That’s because if it appears you are applying to too much credit, lenders may wonder about your financial situation and stability.

An Increased Possibility Of Overspending

While having a higher amount of credit can be great, the downside is that higher credit limits can lead to overspending. You may look at the credit limit and think that you can spend up to that amount, racking up a larger credit card balance. In turn, this could lead you to struggle to make payments, getting you further into debt.

At A Glance: Pros And Cons Of Higher Credit Limits

How To Improve Your Odds Of Getting Approved For More Credit

To improve your odds of getting a credit limit increase or being approved for additional credit, here are some best practices to consider:

• Request a limit increase after your income goes up or you’ve drastically decreased your expenses
• Maintain a good credit score by continuing certain actions such as paying credit card bills on time
• Consistently make on-time payments before reaching out to lenders

Increasing Your Credit Limits With Specific Banks

Understanding how to increase your credit limit also means understanding what the process is for your bank so you know what to say and do.

The following big banks let you increase your credit limit, though it may not be until 6 to 12 months after you become a cardmember. In most cases, you’ll need to provide your requested increase limit, monthly/annual income and monthly housing payment:

• How to increase credit limit with Bank of America: If you’re eligible for a credit limit increase, sign into your credit card account, select the “Card Details” tab and click the link that directs you to the credit line increase page. Otherwise, call the number on the back of your card.
• How to increase credit limit with Capital One: They allow credit limit increase requests online at any time, though they generally decline requests from accounts that haven’t been open for at least 6 months. You can also try calling customer service to ask for a credit limit increase.
• How to increase credit limit with Citi: You will need to sign into your Citi account using your registered email address with specific information, such as proof of income, your tax return, and credit card number.
• How to increase credit limit with U.S. Bank: Log into your account and then select “Request Credit Limit Increase” under the tab labeled “Account services.” You can also call the phone number on the back of the card or customer service at (800) 285-8585.
• How to increase credit limit with American Express: Click the “Request Credit Limit Increase” link in the “Account Services” section under the “Payment and Credit Options” tab after logging into your account. Otherwise, you can call the number on the back of the card. 
• How to increase credit limit with Chase: You can request an increase by either calling the number on the back of your Chase credit card, or through the Chase app under "Manage account." They will ask for your current annual income, employment status, and mortgage or rent payment to consider your request.

The Bottom Line: An Increased Credit Limit Has Pros And Cons

Increasing your credit limit is a lot easier than it sounds, especially if your card is in good standing or you recently received a raise. Since it can affect your credit score either positively or negatively (or in some cases both), requests for an increase in your credit limit should be seriously considered, especially if you’ve had bad credit in the past.

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