Check your credit card offers

All the offers you see on ClearScore are tailored to your credit score and financial circumstances.

See my offers

How to increase your credit card limit

Are you looking to cover an expense or have some extra room in your monthly budget? Find out how increasing the limit on your credit card may be a great way to help you achieve your goals.

19 June 2023Isabelle Coetzee 6 min read
Man holding credit card and phone

Check your credit card offers

All the offers you see on ClearScore are tailored to your credit score and financial circumstances.

See my offers

Are you looking to cover an unexpected expense or have some extra room in your budget? Increasing the limit on your credit card may be a great way to help make that happen. With a higher spending limit, you can take advantage of more opportunities and potentially build a better overall credit score. 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, credit card providers, and financial institutions and take into account the credit score and credit history accessible in your credit report. It’s important to note that spending more credit than you have available can result in additional fees and negatively impact your credit score.

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 with 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.

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 and 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 a high credit score. However, you may receive a lower credit limit if your credit score is low or 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 a good credit score and demonstrate responsible credit usage.

Understanding the difference between your credit limit and available credit is crucial to take 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 to improve your credit utilisation rate and score. An effective way to increase your credit limit is by maintaining a low balance and good payment history, which will 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:

  1. You get access to more available credit and it allows you to make larger purchases or cover unexpected expenses.
  2. Your credit score may improve over time if you consistently make on-time payments and maintain a low credit utilisation rate with your higher credit limit. This is because you will show lenders you’re reliable and pay your debts.
  3. A higher credit score can broaden your options for future credit opportunities, such as personal or home loans, and potentially lead to better interest rates and loan terms - saving you money.
  4. With a higher credit limit, you'll enjoy more opportunities to earn valuable reward points every time you use your credit card to shop. Depending on the rewards program, your rewards may come as cash-backs, frequent flyer miles, or reward points that can be redeemed for exclusive perks and discounts.
  5. If you're looking to increase your credit, it's best to avoid applying for new credit cards, which lead to hard enquiries on your credit report for years. Instead, consider raising the limit on your current card. Multiple hard inquiries can negatively affect your credit score, and opening new accounts could affect your credit history, further impacting your score. Try a safer route and grow your credit without risking your score.

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

  1. A higher credit limit may result in more debt if not used responsibly. It can also negatively impact your credit score if your card utilisation rate increases significantly.
  2. Additionally, some credit card providers may require a hard credit enquiry when considering a credit limit increase, potentially lowering your credit score temporarily.

It's good to weigh the benefits against the potential downsides before deciding to increase your credit card limit. Speak with a financial advisor or credit counselor before making major financial decisions.

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. The good news is that requesting a credit limit increase won't hugely affect your credit score. However, requesting an increase can involve a hard enquiry on your credit report, and it could temporarily lower your score by a few points. It's also important to note that increasing your credit limit can have pros and cons. While it can provide you with more access to credit and potentially improve your credit utilisation ratio, it can 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 because of 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 reducing 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 can be helpful to stop 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.

  1. First, ensure you've fully utilised your existing credit limit and paid it off each month; never use more than 30-40% of the limit available at any given time. This shows that you can handle a higher credit limit responsibly.
  2. 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 could change their decision.
  3. 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.

Interested in applying for a credit card? Make your life easier with ClearScore. It’s straightforward and free; all you’ll need to do is sign up and we’ll provide you with credit card offers tailored to your credit score.

Isabelle Coetzee Image

Written by Isabelle Coetzee

Freelance Copywriter

Isabelle is a freelance finance writer and journalist in Cape Town. She helps make managing your personal finances calm, clear and easy to understand.