How to ask for a credit limit increase

Before we get into how to ask for a credit limit increase, let’s review a more basic question: What is a credit limit?

A credit limit is the maximum amount your credit card issuer will allow you to charge on a single credit account.

In some instances, if you’re a responsible spender and routinely pay off your balance on time, the card issuer might automatically raise your credit limit even if you didn’t ask for an increase.

But card issuers don’t always automatically increase your credit limit. If you want a credit limit increase, most of the time you must be proactive.

1. Ask yourself why you want a credit limit increase

If you’re thinking about asking for a credit limit increase on your credit card, the first step is to assess your current financial situation. Consider the pros and cons of a credit limit increase.

On the plus side, a higher credit limit may lower your credit utilization rate. Credit utilization is the amount of available credit you’re using out of your overall credit limits. Most experts recommend keeping your overall credit utilization below 30%. Lower credit utilization rates suggest to creditors that you can use credit responsibly without relying too heavily on it.

Then again, a higher credit limit could also lead to trouble. “A higher limit may lead some to feel that there is that much more room to spend,” warns Bruce McClary, senior vice president of communications at the National Foundation for Credit Counseling. “Too much of a good thing can be bad, especially if you start opening more accounts with high credit limits.”

2. Know your credit history

Get your free VantageScore credit scores and reports from two major credit bureaus at Credit Karma to help figure out your next move. And don’t worry — checking your credit scores on Credit Karma is a soft inquiry, which will never affect your credit.

When you request a credit limit increase from your credit card company, it may perform a hard inquiry to determine your eligibility. A hard inquiry remains on your credit reports for approximately two years and may impact your credit scores for one year or more depending on the scoring model used.

3. Gather the documents you’ll need when you ask for a credit limit increase

Your card issuer may want to know your current annual income, employment status and how much you pay for housing each month. Have that information ready to go before you call.

That’s right, we said call. You can sometimes ask for a credit limit increase by applying on your card issuer’s website, but you’ll have a better opportunity to ferret out information if you speak to a representative on the phone.

4. Make your case

When asking for a credit increase, keep the request simple and straightforward.

• Have your talking points prepared beforehand, such as why you want the increase and how much of an increase you’d like.
• Make a list of questions you want answered before committing to the request. For example, will you be able to ask for another credit limit increase later if you want one? Will this request result in a hard inquiry on your credit reports?
• Be polite and explain why you’re asking for a credit limit increase. Don’t lose your cool if things aren’t going your way or if the representative has an attitude. Instead, consider getting off the call and trying again later with a different agent.
• If you don’t succeed, ask why. You’ll want to know the exact reason the increase was denied so you can work on creating a situation where you’re more likely to be approved. If you’re juggling too many high balances, for example, create a plan to pay them down. Once you’re in a better position, you can try again.

Bottom line

Before you ask for a credit limit increase on your credit card, first assess your current financial situation. Be honest with yourself about why you want a higher credit limit. Then, if you still think a credit limit increase is in your best interest, contact your card issuer and make your case.