A guide to increasing your credit limit
Your credit limit is the maximum amount you can spend on your credit card. While this amount is initially set by your provider, you can ask – or your provider may offer – to increase your limit over time.
There can be pros and cons to increasing your credit limit. Use our guide to understand what you need to consider beforehand and how to try and increase your credit limit if you decide it’s right for you.
Your credit limit is the maximum amount you can spend on your credit card. While this amount is initially set by your provider, you can ask – or your provider may offer – to increase your limit over time.
There can be pros and cons to increasing your credit limit. Use our guide to understand what you need to consider beforehand and how to try and increase your credit limit if you decide it’s right for you.
60-second summaryHere are the top need-to-knows about increasing your credit limit:
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Why does my credit limit matter?
At a most basic level, your credit limit is important because it determines how much you can spend. But it’s also marked on your credit report, which means other lenders can see how much credit has already been given to you if they run a credit check. This will help them decide whether to offer to you – and if so, how much credit they’re comfortable with offering. They’ll want to avoid lending you more than you’re likely to be able to repay.
Is there a benefit to raising my credit limit?
One potential benefit of an increased credit limit is that it can improve your utilisation ratio, which in turn can improve your credit score. Your credit utilisation ratio is the percentage of credit you’ve spent against your overall available credit limit. For example, if you have a credit limit of £4,000 and you’ve only spent £1,000, you have a utilisation ratio of 25%.
You should ideally aim to use only 30% of the credit available to you, as this shows lenders that you’re a responsible credit user.
Increasing your credit limit shouldn’t encourage you to spend beyond your means.
By increasing your limit, you’ll obviously have more credit available to spend. This can be useful if, for example, you have a big expense coming up. But spending all or most of your available credit will lower your utilisation ratio. This could negatively impact your credit score, even if you’re keeping up with your monthly repayments.
Remember, whether you’re using 25% or 95% of your available credit, to avoid paying interest you should either:
- Clear your balance in full when your bill comes in, or
- Use a 0% purchase card and clear its balance before the end of the promotional period.
If you don’t think you’ll be responsible with your new credit, it’s best not to increase your limit.
What do I need to think about before increasing my credit limit?
Before you apply for a credit card limit increase,, there are a few things to think about:
- Why do you want a credit increase? If you want the assurance of available credit should you need it, or are keen to improve your credit utilisation ratio, it could be a sensible idea. But if it’s because you’re having problems with existing debt, increasing your limit may not be the best solution.
- Can you afford it? You’ll need to be sure you can pay back what you owe and keep up with your minimum repayments at the very least.
- How long it’s been since you took out the card or last increased your limit. Lenders may only allow a credit limit increase after a certain amount of time has passed – you might not be able to increase it whenever you want.
- Impact on your credit record. If you request a credit increase, the new limit will be recorded on your credit file which could impact future credit applications.
How do I increase my credit limit on my existing card?
If you’ve considered these factors and still want to increase your credit limit, you can either wait for an automatic increase or ask for one.
Automatic increase to your credit
Many credit card providers will increase your credit automatically if you’ve shown that you can manage your credit effectively – by keeping up with your monthly repayments, for example.
If you’ve shown that you’re a responsible credit card user, you could be offered a higher credit limit as frequently as every six months. An automatic increase doesn’t need your permission to be put in place, but you’ll have 30 days to reject the credit limit increase. Some lenders will also let you change your settings so increases don’t get applied automatically.
Request an increase
You can also contact your provider to ask for a credit limit increase. Some providers might carry out a hard credit search before they consider this. A hard search can be seen by other lenders and could impact your credit score. Your provider will either:
- Agree to your credit limit request
- Reject it
- Offer you a smaller increase.
What information do I need to request a credit limit increase?
If you’re requesting an increase to your credit card limit, your lender will typically ask for your:
- UK address history
- National Insurance number
- Employment status
- Annual gross income
- Requested credit limit.
Should I increase my credit limit?
An increase in credit limit might work well for you if you:
- Have a solid income
- Have a good history of managing your finances
- Regularly pay off your credit card in full each month.
For example, a credit limit increase can be handy if:
- You’re planning a big expense but are confident you can comfortably pay off what you owe
- You use your credit card for work-related expenses, so you’re not left with a cashflow problem before you have a chance to claim them back.
But if you’re struggling to make ends meet and pay off existing debts, a credit increase might only add to the problem. If you’re trying to get out of debt, the last thing you need is more debt on top of that.
If this is the case talk to your credit card provider. Under FCA rules, it must consider your situation and offer ways to help – for example, a reasonable repayment plan to help you clear your credit card debt more quickly.
At this point it might be better to ask about lowering, rather than raising, your credit limit, to help you avoid overspending.
Find out more about tackling credit card debt.
What are the alternatives to increasing my credit limit?
It’s important to consider all your options before increasing the limit on your credit card. These could include:
A personal loan
If you’re looking to borrow more money, an unsecured personal loan might work out cheaper than increasing the limit on your credit card. Interest rates are typically lower and can be spread over a longer period of time on a fixed-rate, fixed term basis.
An arranged overdraft
While interest rates on overdrafts can be high, some banks offer an ‘interest-free buffer’ for small amounts. But be mindful that an overdraft should only be used in the short term to cover an emergency expense like an unexpected bill. It’s not generally a viable option for large amounts of money or long-term borrowing.
A different credit card
If your main aim is to improve your credit utilisation ratio, you could do this by applying for another credit card that better suits your needs:
- Some credit cards have a sign-up bonus and you could benefit from cashback and rewards cards (though these cards only tend to pay if you clear your balance in full every month)
- You could also check whether you’re eligible to transfer your existing credit balance to a card with a higher credit limit and lower interest rates, or take out a separate, additional card.
Compare the Market acts as a credit broker, not a lender. To apply you must be a UK resident and aged 18 or over. Credit is subject to status and eligibility.
Frequently asked questions
How do I find out what my credit limit is?
Once you’ve applied for a credit card, you’ll usually be told the limit either when you’re accepted or when you receive the card.
Your credit limit will also be shown on your credit card statement. And if you use an online account or app to manage your credit card, you’ll see your credit limit when you log in.
How long should I wait before asking for a credit limit increase?
If you’ve only just got your credit card, it’s probably best to wait a few months before asking for an increase. This will give you time to build your credit score and show you can manage your repayments responsibly.
How can I improve my chances of getting a credit limit increase?
Before you ask for an increase to your credit limit, there are a few things you can do to improve your chances of being approved:
- Pay on time, every month
- Wait until you’ve had your card for a few months before asking for an increase
- Don’t ask too often – it might look like you’re struggling with your finances, which will make you look like a bigger risk to the lender
- Keep your credit utilisation rate low – try to aim for 30% or under.
What happens if I go over my credit limit?
Going over your existing credit limit could mean:
- Your card is declined when you try to pay with it
- Your provider could freeze the card until you’ve paid off some of the balance
- You’ll be charged a fee for breaking your agreed credit limit
- If you have a 0% credit card, you’ll most likely lose the interest-free period and be charged moved onto a much higher interest rate
- If you continually overspend, your provider could ask you to pay back the full balance and even close your account
- You’ll damage your credit score.
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