Should You Increase Your Credit Limit? Will It Hurt Your Score? Answered

Your credit limit is the amount you can spend on a credit card during any given billing cycle, and your total credit limit is the sum of your available credit across all of your credit cards. The easiest way to increase your credit limit is to consistently make on-time payments and wait for your issuer to increase your limit automatically. Most issuers examine your credit profile every six to 12 months to determine if you’re eligible for an automatic increase.

However, these increases can be small, and you may be eligible for more frequent increases that allow you to lower your overall credit usage. There are several reasons why you may want to increase your credit limit, but the request can temporarily lower your credit score, and there are times when it might not be best to make such a request. Below, we provide more information to help you decide if it’s the right time to request a credit limit increase.

Should I Increase My Credit Limit?

Whether or not you should increase your credit limit will depend on several factors. The main benefit of a higher credit limit is that, unless you plan to increase your spending significantly, it means a lower utilization ratio, and therefore, a higher credit score (as we’ve previously reported). A higher credit score is beneficial for future financing, mortgage, and credit card applications.

Another reason to increase your credit limit may be to accommodate increased spending without disrupting your utilization ratio. For example, if you’ve recently purchased a home or started a family, you may be spending more per month on things like groceries, furniture, and other household supplies. If you can afford to make your monthly payments on time, an increased credit limit can help you purchase these things on credit (and earn the cash back or other perks that come with your credit card) while still maintaining a low utilization ratio.

Finally, most credit card issuers want to have the most updated income information for cardholders. If you’ve recently graduated college, started a higher-paying job, or received a raise, you can update your information with your issuer and request a credit limit increase that matches your income.^[1][2]

How Much Available Credit Should I Have?

In general, experts recommend that you use no more than 20% to 30% of your available credit during any billing cycle,^[3] so your ideal credit limit will depend on your spending and your financial situation. You can tailor your spending habits to fit your credit limit, and you can also request a limit increase if your spending is higher, as long as you can afford to make your payments.

If you can afford to make your payments on time, there is really no such thing as having too much available credit.^[3] Credit utilization ratios as low as single-digit percentages are helpful for improving your credit score.

Impact on Credit Score

If you wait for your credit card issuer to do an automatic increase, it will not pull your credit, so there will be no impact on your credit score.

However, requesting a limit increase may result in a hard credit pull, which can temporarily lower your credit score by a few points (typically about five to 10).^[4][5] If you request an increase on multiple cards at the same time, your score may drop a considerable amount. Because of this, it may not be best to request a credit limit increase right before doing something like applying for a mortgage or a car loan since lenders will be looking at your credit score.

If you’re anticipating a large purchase that requires financing and you want a higher credit limit, you should request an increase well in advance to give your credit score time to recover.

Issuer Policies

Whether or not there will be a hard credit pull when you request a limit increase will depend on the card issuer’s policies. Some companies always do a hard credit pull, while some will only do a hard credit pull if you request a significant increase (e.g., more than $2,000). The policies for most major credit card issuers are as follows:

• American Express: Typically a soft pull^[4]
• Bank of America: Typically a hard pull^[6]
• Barclays: Typically a hard pull^[7]
• Capital One: Soft pull^[5]
• Chase Bank: Hard pull^[8]
• Citibank: Varies^[9]
• U.S. Bank: Varies^[10]
• USAA: Typically a hard pull^[11]
• Wells Fargo: Varies^[12]

When To Request a Credit Limit Increase

If you want to request an increase, you’ll at least need to wait at least 90 days (three months or longer) after opening a credit card account.^[1][13] Credit card issuers require you to build up some payment history before they consider increasing your limit. American Express has more flexible requirements and allows cardholders to request an increase after just 60 days.^[14]

As mentioned above, it’s good to request a credit limit increase after starting a new job or receiving a raise. Additionally, if your credit score has recently improved after you’ve paid down some debts or established a pattern of on-time payments, it may be a good time to request an increase. A higher credit score lets your credit card issuer know that you manage your finances responsibly and can likely handle a higher limit.^[15]

While exact policies can vary by issuer, most will let you request and be approved for a credit limit increase every six months.^[4] You can check your card’s policies or contact your issuer to find out how often you can request an increase.

When Not to Request a Credit Limit Increase

There are some times when it may not be a good idea to request a credit limit increase. If you’ve received an increase in the past six months, it’s unlikely that you’ll be approved for another increase.

Also, as mentioned above, if you anticipate opening a new loan or financing account soon, it’s best to avoid requesting a credit limit increase that can lower your credit score for a bit. It’s also not a good idea to request an increase after you’ve been laid off, you’ve maxed out a credit card, or you’ve experienced some other change that lowers your income, credit score, or overall repayment ability. Federal law requires the issuer to consider your ability to pay, so it will likely deny your request.^[2]

Before requesting a credit limit increase in a tough financial situation, it may be better to first try to improve your credit score. Our related research lists several credit repair strategies.

How Much is a Typical Credit Limit Increase?

Each increase is tailored to the cardholder’s specific situation. For an automatic credit limit increase, the amount will vary based on several factors, including:^[16]

• Your current credit limit
• Your spending habits
• Your payment history
• Your credit score
• How long it’s been since your last limit increase

If you request an increase, most issuers allow you to request a customized amount. If you want to avoid a hard credit pull, consider asking for a smaller amount (typically under $2,000). If you’re looking to decrease your utilization ratio by a certain amount, you can do some calculations.

For example, if you want to get your spending to under 20% of your total credit limit, add up all of your expenses during a billing cycle, then multiply by five (since 20% is one-fifth of 100%) to get the total credit limit you need. Then, subtract your current limit from the new amount to determine how much of an increase to request.

Average Total Credit Limits by Generation

If you’re looking to see how your credit limit compares to that of your peers, the major credit reporting bureau Experian has collected data from Americans in its credit database to determine average total credit limits (across all cards) by generation.^[17] The table below provides a summary of the credit bureau’s findings:

The general trend is that those with higher credit scores have higher credit limits, leading to a cycle of increases. A higher credit score typically means that you handle your card(s) responsibly, which leads to credit limit increases.

What is a High Credit Limit?

Most high-limit credit cards typically start with limits around $5,000 or $10,000.^[18] While it is possible to work up to a much higher limit with time — especially if you request an increase whenever possible — those with high total credit limits typically have multiple credit accounts. If you’re looking to significantly increase your total credit limit at one time, you may want to consider applying for another credit card if it’s within your means.