Possibilities for increasing your credit limit on your credit card
Quick insights
- You may request an increase in your credit limit by contacting your lender directly. Your lender will review your request and decide whether to approve the increase.
- Having a healthy credit score before requesting a credit limit increase may improve your chances of one being approved.
- Maintaining healthy financial habits, such as making timely payments and keeping a low credit utilization ratio, is generally recommended, regardless of whether your credit limit increases.
A credit limit is the maximum amount of money you can charge or borrow on your credit card account before you need to pay down your balance. You may be looking to increase this limit for a variety of reasons, such as to prepare for a large purchase or to help lower your credit utilization ratio. Below we’ll review some strategies to increase your credit limit on your credit card.
How do I get a higher limit on my credit card?
To get a higher credit limit on your credit card, you will need to make a request with your lender. However, before you do that, you may want to think about ways to potentially improve your chances of getting a higher credit limit.
Your credit limit is determined based on several factors, including your credit score, income and credit history. That’s why maintaining a healthy credit score and payment history can be important to helping you get a higher credit limit, as demonstrating creditworthiness may make you a better qualified candidate.
Before you request a higher credit limit, you may want to consider the following strategies, which may help improve your chances of getting a higher credit limit on your credit card:
- Maintaining or improving your credit score such as by making regular, on-time payments.
- Maintaining or lowering your credit utilization ratio, which is the amount of credit you use against your total available credit limit (about 30% or lower is generally considered favorable).
- Keeping your credit card account active and open and waiting some time after getting approved for a card to request an increase; how long you’ve had your card may affect your eligibility for a higher limit.
- If you've recently increased your income, adding that to your profile and/or credit limit increase application may help with getting a credit limit increase.
Steps to request a credit limit increase
Though they vary by lender, typical steps to request a credit limit increase may include:
- Reviewing your current credit card’s terms and conditions.
- Contacting your credit card issuer to request a credit limit increase. You might do this by speaking with a representative or, in some cases, by using your online banking app.
- Providing any necessary paperwork or documentation that may be required, such as proof of income.
- Submitting your application and waiting for your approval decision.
How can a higher credit limit help me?
You may be able to benefit from a higher credit limit in the following ways:
- Improved credit utilization ratio: A higher credit limit may help lower your credit utilization ratio if you manage your credit wisely and avoid overspending.
- Improved credit score: By reducing your credit utilization ratio, a higher credit limit might contribute positively to your credit score. A better credit score may lead to more favorable loan terms and interest rates in the future.
- Potential for better rewards: Some credit cards offer rewards or cashback on purchases. With a higher limit, you can take advantage of these benefits on larger transactions, potentially earning more rewards.
- Emergency preparedness: A higher credit limit may offer more flexibility for spending and serve as a financial cushion in emergencies, or help you to cover unexpected costs without immediate financial strain.
- Opportunity for making larger purchases: A higher limit may enable you to make larger purchases that might have been out of reach with a lower limit, such as travel bookings or home improvements.
Managing a higher credit limit requires thoughtful planning to help ensure that potential benefits are considered alongside possible risks. Let’s review some of these in more detail below.
Risks and considerations
- Overspending: A higher credit limit presents the risk of spending more than you can afford. Maintaining thoughtful spending habits may help you avoid reaching your full credit limit, even if your limit increases.
- Accruing high-interest debt: If you overspend and carry a balance, you may incur high interest charges, which can quickly accumulate and become difficult to pay off.
- Impact on credit score: While a higher credit limit can improve your credit utilization ratio, if you max out your card or miss payments, it can negatively affect your credit score.
- Understanding terms and interest rates: Changes in terms or interest rates may accompany a credit limit increase. Higher limits might come with different conditions that could affect your financial situation.
Alternative methods for increasing credit limits
Whether a credit limit increase isn’t available to you or you’re looking for something that aligns better with your financial goals, there are a few alternatives you may want to consider:
- Increasing your available credit on a card by utilizing a balance transfer, which is where you move debt from one credit card to another card (often the debt is moved to a card with a lower interest rate). Note that a balance transfer usually comes with fees.
- Becoming an authorized user on another person’s credit card; the primary cardmember can add you to their credit card account so that you can make purchases using their credit. If you become an authorized user, make sure the primary cardmember pays their balances on time so your credit history is positively affected.
- Looking out for credit limit increase offers and promotions and understanding their terms and conditions.
- Applying for a personal loan to get access to more credit. Note, Chase does not offer personal loans.
Conclusion
Increasing your credit limit can have several benefits, including lowering your credit utilization ratio and more financial flexibility. However, it’s important to consider the risks and continue to manage your credit responsibly. Maintaining financial habits such as making timely payments can help support your financial health.
