There are good reasons to ask your credit card issuer to raise your card’s credit limit. Maybe you want the ability to charge more to your card, or maybe you want the credit increase to positively affect your credit score and reports. No matter why you want to increase your credit card’s limit, there are certain times when it makes sense to do so, and certain times when it doesn’t.
The Benefits of a Credit Limit Increase
There are two major benefits to raising your credit card’s credit limit.
The first one is self-explanatory. Raising your credit limit gives you more purchasing power with your card. Maybe you want to be prepared in case you have an emergency expense, such as replacing a home appliance. Or maybe you want the ability to put all your monthly expenses on your card (and ideally pay off the balance before interest kicks in).
The second benefit is that a higher limit can positively affect your credit score. One of the major factors that goes into your credit score is your credit utilization ratio, which is the amount of available credit you are currently using. Maintaining a low credit utilization ratio is good for your credit score, and that is naturally easier to do when you have a higher credit limit.
When to Ask for a Credit Limit Increase
The best times to ask for a credit limit increase can be as follows:
- You have a strong credit score. When your credit is strong, you have successfully demonstrated your ability to manage your credit and make your payments on time. Credit card issuers are more likely to approve your request for a credit increase if you have good credit.
- You are a good customer. When you have had your card for a while and you always use it responsibly, you have a strong case for raising your limit. It’s a good sign if you have a long history of making payments on time, every time.
- Your financial circumstances have improved. If you got a new job with a higher salary or a raise, you may be able to use this to successfully argue for a credit limit increase.
When you Shouldn’t Ask for a Credit Limit Increase
In some scenarios, you may want to hold off on requesting a credit limit increase:
- Your credit needs work. If your credit is poor to fair (you can see a breakdown of credit score ratings here), you may want to wait until you’ve worked toward your credit goals. Your card issuer is less likely to approve your request if you don’t have strong credit.
- You don’t have good standing as a customer. If you’ve only had your card for a limited time, your card issuer may not have enough customer history to determine if it is willing to raise your limit. And if you recently missed a payment or maxed out your card, your card issuer is less likely to approve your request.
- You are struggling financially. If you are having trouble paying your bills or you’ve recently experienced a reduction of income, raising your credit limit can possibly get you into financial hot water. And if you’re planning to charge the total of your credit limit increase, you need to reconsider before you amass more debt.