Unsolicited credit limit increases

Our clear guide will outline unsolicited credit limit increases and explain why credit card providers sometimes do this without asking you.

Our clear guide will outline unsolicited credit limit increases and explain why credit card providers sometimes do this without asking you.

Anelda Knoesen
From the Money team
minute read
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Posted 13 JANUARY 2020

A guide to unsolicited credit limit increases

If you have a credit card and you’ve been making all of your monthly repayments on time, this might be reflected in a credit increase from your provider, as you’ve shown you can effectively manage your credit. However, this isn’t always done with your permission and you may just get notified of the date of your increase and the amount in the post.  

What is an unsolicited credit limit increase?

An unsolicited credit limit increase is what happens when a credit card provider increases the level of spending a customer is able to make on their credit card without the request having been made by that customer.  

A credit increase can encourage a customer to spend more and build up a larger outstanding balance, which they may struggle to pay back to the provider – leading to more personal debt. A provider shouldn’t increase limits for customers who are regularly exceeding their current limit, are missing payment dates or have shown that they are struggling to meet their repayments.

Why might my credit card limit be increased?

Credit card companies might increase your limit if they might categorise you as a ‘good risk’. This can be the result of you using your card responsibly – for example, you’ve been meeting your monthly repayments in full. Typically, a provider may increase your limit as an incentive for you to stay loyal to them. 

What are the rules around increasing credit card limits?

Under Financial Conduct Authority (FCA), customers can opt out of receiving automatic credit limit increases. Customers in persistent debt for 12 months or longer should not now be offered credit limit increases, which the FCA estimated would result in around 1.4m accounts per year not receiving such offers.

Can I reject a credit card limit increase?

Yes, you can. If you have had your credit limit increased then will be notified by your provider by post and via online banking (if you are registered). You have a 30-day notice period to reject the increase – and you’ll need to contact the provider and tell them. You can also request to lower the limit on your card. Understanding your credit card statement is a good starting point for staying on top of your credit card account.

Is a credit limit increase a good thing?

That will depend on many factors, including your current financial situation. Clearly, if you’re trying to contain your spending on credit, then being given more is never going to be a good thing. Don’t forget, all types of credit is borrowing – and that borrowing will need to be paid back. If you’re worried about having a bad credit history, then you can find out more about how to  build your credit  or apply for a card specifically aimed at those with  bad credit.

Which credit card is right for me?

There are lots of credit cards to choose from and the one that’s right for you depends on your own financial circumstances. Used with care, a credit card can be really useful for life’s little emergencies and you can build up a more positive credit score at the same time.

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