When it comes to your credit limit, things aren’t set in stone. There are a couple of ways you may be able to get a credit limit increase.
Let’s explore what a credit limit is, how to increase it, the pros and cons of a higher limit and what to do if you aren’t able to raise your limit the first time around.
What is a credit limit?
A credit limit is the maximum amount you can spend on a given credit card. Once you hit your limit, new transactions may be declined.
In general, people with higher credit scores or incomes may be more likely to qualify for higher credit limits. As you use your credit card responsibly, you may be able to increase your limit.
If you have a low credit limit, that may make big-ticket purchases challenging. Your credit limits also affect your credit utilization, or the percentage of your total available credit you’re using. Keeping your utilization lower can positively impact your creditworthiness.
How to get a credit limit increase
There are 2 main ways to get a credit limit increase: You can request one from your lender or get one automatically.
Request a limit increase
Many lenders allow you to request a credit limit increase online, via their mobile app or over the phone. Your card may need to have been open for a certain amount of time, such as 3 months, before a lender will consider a limit increase.
Lenders may consider the following factors during their decision:
- Income
- Credit score
- Existing expenses
- Recent credit applications
If you call to request a credit limit increase, it may help to explain why you want one. Be prepared to share your income and housing expenses. It may take up to 30 days for your request to be approved, though some issuers may instantly approve your credit limit increase.
Get an automatic limit increase
Some lenders automatically increase your credit limit if you meet certain criteria. For example, this can happen if you’ve recently started making more money and update your income. Your lender may also ask you to update your income information, which could mean they’re thinking about giving you an increase.
Benefits and drawbacks of increasing your credit limit
Pros
- Can help lower your credit utilization ratio if your spending habits stay the same
- Can increase your purchasing power
Cons
- Can lead to a higher risk of overspending
- May add a hard credit inquiry to your credit report (which can have a small, temporary impact on your credit score)
What if you can’t get a credit limit increase?
If your lender rejects your request for a credit limit increase, you may still have options:
- You can apply for a different card that may offer a higher credit limit
- You can wait for an automatic increase
- You can request an increase again after several months
Paying your full balance on time and keeping your credit utilization ratio low can help increase your chances of being approved in the future. It’s also important to consider your timing. For instance, if you wait until you’ve been promoted to a higher-paying role or paid off other debts, you may be more likely to increase your credit limit next time.
Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.
