How to Boost Your Credit Limit

Kat Tretina

December 3, 2018  •  3 Minute Read

Financial Tips

When you get your first credit card, your credit limit is typically very low. It could be as small as a few hundreds dollars. While getting a credit card is a great step in building your credit, having such a small credit limit can be frustrating.

But can you increase your limit? It’s easier than you may think. Below, learn about the benefits of boosting your credit limit and how to request an increase.

3 Benefits of raising your credit limit

Raising your credit limit has several key benefits.

1. Increases your spending power

With a low credit limit, making any big purchase can be an annoying experience. For example, paying for moving expenses, new furniture, or even electronics can exhaust your credit limit.

You may have to pay for a portion with cash on top of your credit card, or combine multiple cards to make one purchase.

By raising your credit limit, you have more spending power. You can charge more without worrying about getting declined at the register. And, you get all of the added benefits of a credit card — such as extended warranties and purchase protections — for your whole purchase.

2. Lowers your credit utilization ratio

Your credit utilization plays a big role in determining your credit score. Credit utilization is how much of your available credit limit you use. For example, if your credit card has a $1,000 limit and you charge $500, you have used 50% of your available credit. The lower the utilization, the better your credit score.

When you have a low credit limit, keeping your credit utilization low can be difficult. Even if you pay off your bill in full each month, chances are you have enough routine expenses that eat up a significant part of your spending limit.

That’s why increasing your limit can be so important. If you increase your credit limit but keep your spending the same, you’ll be using only a small portion of your available credit. That means you’ll have a better credit score.

3. Helps you avoid dings on your credit score

When you have a low credit limit, you may apply for multiple cards to give you more spending power. But every card you have means a creditor is reviewing your credit report, which can drive your credit score down.

By having just one or two cards with a higher limit, you can enjoy more purchasing power without creditors having to pull your credit.

How to get a credit limit increase

Getting a credit line increase is likely a lot simpler than you might think.

First, make sure enough time has passed. You want to prove to the creditor that you are a reliable credit card user who makes your payments on time every month. Typically, you can request a credit line increase after six to 12 months. If you miss a payment, you might have to go longer before you can qualify for a credit limit increase.

Once you’ve made enough payments and are ready for a credit line raise, your next step is to contact customer service.

Some companies make it very easy. On your credit card account website, there may be an option where you can request a credit increase online. Otherwise, you’ll have to call your credit card company’s customer service line.

If that’s the case, be prepared to speak to the representative. Explain that you’ve been a customer for six to 12 months, have made all of your payments on time, and would like a credit line increase.

In most cases, the representative will approve your request and will tell you your new credit limit. But sometimes, they may determine that you’re not quite ready for an increase. That might be because you have too many forms of debt, or that your income is too low. In that situation, they’ll let you know the reason for the denial.

If that happens to you, don’t be discouraged. Keep making your payments on time, and try again in six months.

Boosting your spending power

Increasing your credit limit can help give you more spending power and will boost your credit score. However, make sure you use the new limit responsibly. With a higher credit line, it’s easy to get carried away with purchases. Instead, focus on paying off your bill in full each month to avoid interest charges.

If you’re looking for a new credit card, check out our roundup of the best credit cards of 2018.