How to increase your credit card limit

Are you looking to cover an unexpected expense? Before increasing your credit card limit, ensure you can afford the additional credit repayments. Increasing your limit may provide flexibility, but only if it suits your financial circumstances. With a higher spending limit, you may have more financial flexibility for emergencies, provided you can afford the repayments and use credit responsibly to avoid over-indebtedness. But how do you go about increasing your credit card's limits?

A credit limit is the maximum amount of credit a lender will give you. The lender uses your credit history, income, and debt-to-income ratio to decide your credit limit. Credit limits are typically established by lenders and card providers based on your credit score from a registered South African credit bureau (such as TransUnion or Experian) and your credit history. It's important to note that spending more credit than you have available may result in additional fees and may negatively impact your credit profile.

Your credit card limit is the maximum amount you can borrow from your credit card provider. It's a pre-approved credit limit set by them. Your credit limit determines how much you can spend on your credit card at any given time. If you've hit your limit, you can only use the card after you pay the balance. If you manage your credit responsibly and make your payments on time, you can increase your credit card limit over time, giving you more flexibility and purchasing power. However, use your increased credit limit wisely and within your means to avoid overspending or getting into debt. A poor or nonexistent credit history can result in a lower credit limit when approved for a credit card. It's essential to carefully consider the potential consequences before requesting a limit increase and to borrow what can be repaid responsibly. You can request a credit limit increase from your credit card provider, but this request is subject to certain conditions and requirements.

Learn: How to choose a credit card

When you apply for a credit card, one of the most important aspects to consider is the credit limit. But how exactly is the credit limit determined? Your credit card limit usually depends on your credit score from the relevant bureau and your income. Lenders evaluate your creditworthiness based on your credit history, payment history, and the amount of credit you already have. You may be offered a higher credit limit if you have a good payment history and strong credit scores. However, you may receive a lower credit limit if your credit score is low or if you have a large debt. But not to worry, if you're a first-time borrower, your credit card provider will watch your spending and repayment habits and potentially increase your credit limit over time. If you want to increase your credit card limit, it is essential to maintain good credit scores and demonstrate responsible credit usage.

Understanding the difference between your credit limit and available credit is crucial to taking advantage of the benefits of your credit card. Your credit limit is the maximum amount you can borrow at any given time. Your available credit is the credit remaining on your account after accounting for your current balance (the amount of credit you've already spent) and pending transactions. Try to maintain a high available credit, which may help improve your credit utilisation rate and profile. An effective way to increase your credit limit is by maintaining a low balance and good payment history, which may improve your creditworthiness and increase the likelihood of a higher credit limit being given by your card issuer.

If you're looking to increase your credit card limit, consider these steps you can take. One option is to request a limit increase directly from your credit card provider. To successfully secure a limit increase, you'll need:

• A history of responsible card usage.
• A good credit score.
• An ability to pay back any increased balances.
• Proof of income or employment status to demonstrate financial stability.

Alternatively, some issuers may automatically increase your limit after a period of consistent, on-time payments. By following these guidelines and actively managing your credit card account, you can give proof to your card provider that you can afford to increase your credit limit.

Increasing your credit card limit can have benefits for your financial well-being:

• You get access to more available credit, and it allows you to make larger purchases or cover unexpected expenses.
• Your credit record or report may improve over time if you consistently make on-time payments and keep your credit utilisation low. This is because you will show lenders you're reliable and pay your debts.
• A stronger credit profile may broaden your options for future credit opportunities, such as personal or home loans, and could lead to better interest rates and loan terms.
• With a higher credit limit, you may earn more reward points if you use your card responsibly. However, remember that interest charges and fees may outweigh rewards if balances are not paid in full each month. Depending on the rewards programme, your rewards may come as cash-backs, frequent flyer miles, or reward points that can be redeemed for exclusive perks and discounts.
• If you're looking to increase your credit, it's best to avoid applying for new credit cards, which can result in hard enquiries that remain on your credit report for up to a year. Instead, consider raising the limit on your current card. Multiple hard inquiries may negatively affect your credit scores from the relevant bureau, and opening new accounts may affect your credit history, further impacting your scores. Try a safer route and grow your credit without risking your score.

Learn: What is a credit enquiry?

While you may be interested in increasing your credit card limit, there are some downsides to consider:

• A higher credit limit may result in more debt if not used responsibly. It may also negatively impact your credit profile if your card utilisation rate increases significantly.
• Additionally, some credit card providers may require a hard credit enquiry when considering a credit limit increase, potentially lowering your credit scores from the relevant bureau temporarily.
• It's good to weigh the benefits against the potential downsides before deciding to increase your credit card limit. Speak with an FSCA-registered financial adviser before making major financial decisions. If you're struggling with debt, consider consulting an NCR-registered debt counsellor.

Learn: How to manage your credit accounts effectively

When you're looking to increase your credit card limit, one of the first things you might wonder is how it'll affect your credit score with the relevant bureau. The good news is that requesting a credit limit increase is unlikely to hugely affect your credit scores from the relevant bureau. However, requesting an increase may involve a hard enquiry on your credit report, and it may temporarily lower your scores by a few points. It's also important to note that increasing your credit limit can have pros and cons. While it may provide you with more access to credit and potentially improve your credit utilisation, it may also tempt you to spend beyond your means and potentially land you in debt.

A decrease in your credit limit can be a frustrating and confusing experience, especially if you've been timely with your payments. However, it's good to understand the reasons why this could happen. One common cause of a reduced credit limit is that the lender perceives an increased risk of default. This risk may arise due to changes in your credit card usage, including increased balances, missed payments, or carrying a high credit balance for an extended period. Additionally, some issuers might lower credit limits if they see a change in your financial status, such as a reduction in your income or opening too many new credit cards. Luckily, there are ways to avoid the risk of your credit limit dropping. Managing your credit carefully and increasing your credit card limit slowly may be helpful to prevent a credit limit drop.

If you're consistently making on-time payments, it can be frustrating when your credit provider refuses to increase your credit card limit. However, there are steps you can take to try to change your credit provider's mind.

First, use your existing credit limit responsibly – ideally keeping usage below 30–40% – and pay off your balance in full each month. This shows that you can handle a higher credit limit responsibly.

Next, consider reaching out to the credit provider and asking for an explanation as to why they denied your increase request. You may be able to address their concerns or offer additional information that might change their decision.

Finally, if all else fails, consider applying for a different credit card with a higher limit. Just be sure to research and read the fine print before opening new lines of credit.

Finding the right credit card shouldn't feel like guesswork. With ClearScore, you can see your eligibility before applying and explore credit cards tailored to your credit profile, whether you're building credit or looking for better rewards.

Here's how it works:

1. Check your eligibility first See which credit cards you're likely to be accepted for before you apply. We use a soft credit check that won't impact your score, so you can explore options with complete confidence.

2. Compare cards matched to your profile You'll see credit cards tailored to your credit score and circumstances. Whether you need a balance transfer card, a card to build credit, or one with cashback rewards, you'll find options that actually match your needs.

3. Apply with confidence Once you've found your ideal card, you can apply directly through ClearScore and track your credit score to monitor how your credit behaviour is reflected over time.

Why choose ClearScore for credit card comparison?

• Free forever - No charges to compare cards or check eligibility
• See your real chances - Know your likelihood of acceptance before applying
• No credit score impact - Soft searches that won't affect your rating
• Personalised matching - Cards chosen based on your credit profile, not generic lists
• Build your score - Track progress and unlock better cards as you improve

Compare credit cards with ClearScore