How to Increase Your Credit Card Limit: The Complete Guide

If you’re approved for a new credit card, you’ll receive an initial credit limit based on numerous factors, including your credit score and credit history, as well as your income and history with that card issuer. But over time, you may find that your credit limit isn’t enough for your needs. In that case, it may be possible to increase the limit of the credit card.

From simply waiting for the next automatic credit limit increase to proactively asking for one, there are often ways to raise your limit. Keep reading to learn more about how to increase your credit card limit – and the benefits of doing so.

Key Points

• Credit card issuers may automatically increase credit limits, but cardholders can also request increases directly through phone calls, online chat, or secured messaging systems.

• Requesting a credit limit increase provides an opportunity to update income information, including raises, side income, government benefits, and even a spouse's income.

• Increasing credit limits might help strengthen credit scores by lowering the credit utilization ratio, which represents a significant factor in credit score calculations.

• Common reasons for credit limit increase denials include excessive outstanding debt, too many recently opened accounts, poor payment history, and insufficient income levels.

• Card issuers may perform either soft credit inquiries, which don't affect credit scores, or hard inquiries, which can impact scores if multiple requests occur quickly.

• Secured credit card holders may be able to increase their limits by depositing additional funds, or cardholders can request transfers from other accounts with the same issuer.

What Is a Credit Limit?

When you’re using a credit card, it’s important to understand how a credit limit works. A credit card’s credit limit is the largest amount that the card issuer is willing to loan to the cardholder. Every purchase you make with the card is considered a loan, and your purchases are typically approved until they total the amount of the account’s credit limit. 

The credit limit on your credit card represents a revolving loan that the card issuer has already approved. The card’s credit limit represents the most that the card issuer is willing to loan you. It exists to limit the card issuer’s exposure to delinquency and default. 

According to the most recent data from Experian, the average credit card limit is $33,980. Most cards have a fixed credit limit that’s listed on your credit card statement each month. However, some cards are advertised as having no preset limit. With these cards, there’s still a limit, but it will vary based on your current balance and creditworthiness. Cards with no preset spending limits are typically charge cards or premium travel rewards cards. 

Are You Eligible for a Credit Limit Increase?

The credit limit that you received when you opened your account was based on just a snapshot of your creditworthiness at the time. But since then, you may have added to your credit history and improved your creditworthiness. For example, you might have paid down some of your existing debt, and your income may have increased. 

If your credit has improved significantly since you originally applied for the card or since you last had your credit limit raised, then you may be eligible for an increase simply given how credit cards work. However, if you’ve had credit problems, you may not be eligible. Other reasons you might not be eligible for a credit limit increase include having the same or lower income, or having recently applied for numerous new lines of credit or credit line increases. 

How to Increase Your Credit Card Limit

Obtaining a credit limit increase may not be that difficult, and you might even be able to get one without doing anything. But in most cases, you will have to contact your credit card issuer to request an increase to the limit of your credit card.

Automatic Credit Limit Increase

Some credit card issuers offer automatic credit limit increases. You might simply receive a notice – in the mail or electronically – that your credit line has been increased. 

Request an Increase From Your Credit Card Issuer

If you need a credit card limit increase and you haven’t received one automatically, then you can always request an increase directly from your card issuer. You can make the request over the phone, through an online chat, or by sending a secured online message. 

When you request a credit line increase, this gives you an opportunity to update your income information. You can mention factors such as additional income from a raise or from money you make on the side. You can also include any government benefits, child support or spousal support, retirement distributions, and other income. It’s even an option to include the income of your spouse or domestic partner, so long as you could use those funds to repay a loan. 

And if all else fails, a card issuer might be willing to grant a credit limit increase if you agree to move a portion of your credit from a different credit card account with the same issuer. In this case, your total credit limit isn’t increased, but you can use that particular credit card account to make more charges. 

Note that to process your request, your card issuer may do a hard or a soft pull on your credit. Soft credit inquiries have no effect on your credit. A hard inquiry can affect your credit, especially if there are numerous hard pulls on your file within a short period of time.

Increase Your Security Deposit

If you have a secured credit card, then your credit limit is a function of the amount of your refundable security deposit. Secured credit cards work much like standard unsecured cards, but they require the payment of a refundable security deposit before you can open an account. With most secured credit cards, the amount of your security deposit becomes the amount of your initial available line of credit. 

Therefore, the easy way to get a credit limit increase for a secured credit card is to place more money on deposit. However, many secured cards have a limit on the amount of your deposit, which will create a ceiling for your maximum possible credit limit. 

Benefits of Increasing Your Credit Limit

There are several potential benefits to having an increased credit limit. Obviously, you would be able to spend more money with that credit card. So if you need to make a large purchase, or if you know that you’re going to need to make many smaller purchases, having a larger credit limit would increase the total amount that you could purchase. For example, if you travel frequently in the course of a month, you might want to make sure that your credit limit is large enough to cover all of the charges you anticipate, as well as any unexpected ones. 

Having a larger credit limit might also help with your credit score. Typically, a large part of your credit score is based on your credit utilization ratio. An important credit card term to know, this ratio is the total amount of debt you have on your credit cards divided by the total amount of credit you’ve been extended. In general, the lower your debt to credit ratio is, the higher your credit score is likely to be. 

One way to lower your credit utilization ratio is to decrease your debt. However, you can also lower your credit utilization ratio by increasing your available credit. You may be able to do this by applying for new lines of credit or by increasing the credit limit on your existing accounts. If you do opt for a new credit card, you might consider getting credit card pre-approval first to help you assess your odds of approval. 

Differences Between Total Credit Limit and Available Credit Limit

Your total credit limit is the total amount that you can borrow from a particular account. Your available credit limit, on the other hand, is the amount remaining that you haven’t used. 

To find your available credit limit, subtract your current balance from your total credit limit. This information is also likely to appear on your monthly credit card statements.

What to Do if Your Credit Limit Increase Is Denied

Any time you apply for a new or increased line of credit, it’s possible that you may be denied. If your application for a credit limit increase isn’t approved, then it may be a good idea to contact the card issuer and ask why. In fact, the law gives you the right to receive an explanation any time you’re declined for new credit or a credit limit increase.

Possible reasons that your request for a credit limit increase might be denied can include:

• Too much outstanding debt

• Too many new accounts

• A poor payment history

• Insufficient income

However, you may be able to fix some of these issues. For example, you could try paying down some of your outstanding debt. You could pay down your balance before the statement closing date, and you'd have a lower outstanding balance on your credit reports.

Or you might increase the amount of income you report, perhaps by adding any income you get from investments, government benefits, or spousal benefits. You’re even permitted to report the income of your spouse or domestic partner, as long as you have a reasonable expectation of being able to access those funds if necessary for the purpose of repaying a loan.

Fees Associated With a Credit Limit Increase

There aren’t any fees associated with requesting or receiving a credit limit increase. On the other hand, if you make charges to an account and they exceed your current credit limit, you could potentially face an over-the-limit fee. However, these fees can only be charged if you have opted in to allow your card to make purchases that are over the limit.

The Takeaway

Your credit card’s credit limit is one of its most significant features, and it’s important to understand how it works. Many credit card users will eventually need a larger line of credit, and, in case you are one of them, you should know how to request it. Once you understand how credit limits work and how to increase your credit card limit, you’ll be in a better position to manage your credit cards responsibly and use them to their potential. 

Part of this also comes down to finding the right credit card for your needs. Lantern by Sofi makes comparing credit cards easy, thanks to its credit card marketplace. For each card listed, you can see the credit score generally needed for a card, the card’s typical annual percentage rate (APR) range, and any notable features, so you can easily sort through the options that might be available to you.