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When should you ask for a credit limit increase?

If you are thinking about a credit limit increase, when should you ask your card provider? Or is it best just to leave your limit as it is?

A credit limit is the maximum amount you are able to spend on your credit card. It is determined by your credit score and how much your card provider thinks you can afford to borrow. However, things come up in life that mean you may need some additional funds, such as increased work expenses or car repairs.

There are practicalities in the timing of asking for a credit limit increase and some things you should think about before making an application. Let’s deal with the practicalities first.

When to ask for a credit limit increase

So, when is the right time to ask for an increase?

Most card providers require you to wait for a specified time (anything from three to six months) after receiving your card before applying for a credit limit increase. This is largely due to the fact that they have already assessed your personal financial circumstances and decided what to lend you, and nothing is likely to have changed since that initial judgement.

However, once you have had your card for a period of time and have stayed within your existing credit limit and made your monthly minimum payments, the card provider can see a personal credit history for you and therefore may be more likely to lend you more money.

There are also restrictions surrounding when you can apply for a credit limit increase if you have already had one. Most providers will require you to wait a set period of time before you can apply for another increase, even if you were successful with your first application.

3 things to consider before applying for a credit limit increase

1. Have you stayed within your existing credit limit and made your monthly minimum payments?

These factors will be key in the decision-making process for the provider on whether to lend you more money.

2. Has your financial situation changed?

You will be asked to provide details of your income and outgoings, so if they remain unchanged from when you took out your card initially there may not be any movement on your credit limit. Similarly, if you have taken out a loan or a mortgage, this could impact on the amount a card provider is willing to lend you based on your overall debt commitments.

3. Does your card provider automatically increase your limit?

Some providers automatically increase your limit if you have managed your credit account well over a certain period of time. If there is no rush to have additional funds, ask yourself whether you could wait until your limit is automatically increased and therefore avoid the risk of your application for a credit limit increase being rejected.

Is there a risk?

Before you contact your provider about a credit limit increase, you should take a moment to think about whether you really need one and what impact it could have on your finances.

Any increase in the level of debt you owe could have a negative impact on your credit score. Credit rating agencies take into account the overall amount that you have borrowed, so if you have a large credit limit on an existing credit card this could work against you when applying for other cards or other financial products such as loans and mortgages. Any application you make to increase your credit limit could leave a mark on your credit file, especially if your application is rejected.  

Also consider that an increased credit limit could tempt you into overspending and therefore lead you to a level of debt you are not comfortable with. If you are going to make a credit limit increase request, consider what you can afford and try not to borrow above your means.

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