You’ve been making your monthly payments, staying within your current credit limit, and crossing your fingers that your credit card company decides to increase your limit.
Maybe you’re making plans to take that month-long Europe trip you’ve been dreaming about, and you want to score some travel points by making a few big purchases on your new card. Or perhaps you’re working on improving your credit score and just need a little credit limit boost to work your way toward financial wellness.
An increased credit limit is not only a reward from your credit card company— it’s also an opportunity for you to continue to prove your financial stability.
Increasing your credit card limit isn’t always easy. That’s why we’ve put together three easy tips to show you how to get a higher credit limit.
- Wait for an Increase to Occur Naturally
- Request a Credit Limit Increase
- Apply for a New Card With a Higher Credit Limit
What Is a Credit Limit & Do I Qualify For a High Credit Limit?
Before diving in on how to raise your credit limit, it’s important to understand exactly how credit works. Your credit limit is the maximum amount of money you are allowed to spend on a given credit card. To determine this amount, credit card companies evaluate your spending and debt management habits to offer you a line of credit they believe you will pay back.
The same process is applied when they consider you for an increased credit limit. The increase percentage varies for each individual, and each credit card company has different qualifications for credit card limit increases.
Credit limits are generally determined by:
- Payment History
Your payment history is one of the most important factors when it comes to responsible credit card usage. Making sure you make all your payments on time will help keep you on the good side of your lender or credit card company.
So how does this translate? Having a positive payment history will make you a better candidate for getting a credit card limit increase.
- Your Debt-To-Income (DTI) Ratio
Debt-To-Income (DTI) ratio is all of your monthly debt payments compared to your gross monthly income. The Consumer Financial Protection Bureau says that it’s best to keep your DTI below 43%, especially if you’re trying to qualify for a new line of credit, or are working toward a credit limit increase.
You can calculate your own DTI by dividing your total recurring debt by your gross monthly income, and multiplying the result by 100.
If your DTI climbs above 43%, don’t worry—it’s repairable. Work toward paying off your debts and limiting your spending to chip away at your DTI may improve your credit standing.
- Your Existing Credit Limits and Credit Utilization
When evaluating your eligibility for a higher credit limit, your credit card company will look at how much of your credit you’re currently using. If you’re having to rely on your credit card a lot and are regularly approaching your credit maximums, you may be less likely to be approved for an increase in your credit limit.
Keeping your credit utilization low will make managing your finances easier—and may be the key to getting you approved for a credit limit increase.
- Your Credit Score
Your credit score is the general picture of your financial health. When lenders make any decisions about increasing your line of credit, they will definitely look at your current credit score. It’s a good idea to know where your credit stands by checking your credit score for free with a service like Turbo.
Knowing how to interpret your credit score can also give you a good idea of where you stand with your credit, and can help guide you toward securing a higher credit limit.
Those three magic numbers can have a big impact on many major life decisions,such as buying a home or getting a loan for a new car. Having a good credit score will not only help you meet those milestones, but can also expand your financial freedom.
So, what makes a good credit score? Using the VantageScore credit model, lenders consider scores above 781 to be excellent credit—while the 661-780 range can be considered decent or good credit. Maintaining a credit score within these ranges will help you stay in good standing with lenders and credit card companies where you want to secure an increased limit. If your credit dips below the 661 range, make sure to act on poor credit with consistent, on-time payments, and work hard to chip away at that debt that’s anchoring you down.
How To Get a Higher Credit Limit
Securing a higher credit limit can sometimes happen automatically with excellent credit history, but you may need to ask your credit card company to be approved. Take a look at these three options for increasing your credit limit.
1. Wait For an Increase to Occur Naturally
If you’ve demonstrated good behavior with your existing card, your credit card company may decide to approve you for a credit limit increase automatically.
Credit card companies will likely wait 6-12 months after you’ve opened your account to see that you are able to make your payments on time and manage your debts responsibly. If you’re able to make more than your minimum payments, this will demonstrate good payment habits, and also help you avoid interest fees.
If they decide to increase your limit, your credit card company will notify you of your credit limit increase. They may increase it automatically or on your next billing cycle. If you have any questions regarding your credit limit, it’s best to call the phone number on the back of your credit card.
Once you’ve received a credit increase, it’s only human that you would celebrate your success. It takes a lot of responsibility and willpower to manage your credit well enough that your credit card company rewards you automatically. However, be careful not to overspend on your celebrations. It’s easy to jump back into overspending once you’ve reached a new credit limit—which may end up hurting you later down the road.
2. Request a Credit Limit Increase
If you’re depending on a credit limit increase to help fund a big purchase you’ve already started budgeting for, talking with your credit card company may help you get an increased credit limit.
You can request a higher credit limit in a few different ways. Take a look at these two options to help you decide what works best for you and your credit card company.
Make a Request Online
Many credit card companies make requesting a credit limit increase easy by allowing you to fill out a request form online.
Some companies like Chase will make an instant decision following your request to increase your credit limit. Simply sign in and fill out the required information to get your result.
If you’re not approved right away, continue to follow good credit management practices and you may be able to apply again in the future.
Call Your Card Issuer
Another option to request an increase in your credit limit is to call your creditor directly.
Dial the number on the back of your credit card to speak with a representative about your credit card limit. Have your credit report and a record of your payment history handy as testaments to your responsible credit management habits.
If you were approved for an increase, it’s likely you have a good credit score and history, so keep up the good work!
3. Apply For a New Card With a Higher Credit Limit
Check your credit score
Evaluate your payment history and existing credit score. If you know your current credit standing, you’ll be able to zero in on which credit card options may be best for you – and which you’ll qualify for.
Do your research
Generally, you can find information online that indicates exactly which qualifications you need in order to be approved for a specific credit card. If your credit score falls within a specific card’s qualifications, it may be worth applying. It’s important to check this information before applying to avoid hard credit inquiries dinging your score.
Maintain Good Credit Card Practices
Before applying for a new credit card or asking for a credit limit increase, learn how to manage your credit responsibly. Just one slip-up on payments or overextended credit usage could negatively impact your credit score.
Conversely, if you pay on time and keep your utilization ratio low, you may find it’s smooth sailing to a higher credit limit.