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Applying for a new credit card may seem like the perfect fit when you want to manage your spending in a way that’s convenient for you.
Whether it is a introduction 0% APR that you are looking for, or simply more generous rewards on purchases, credit cards let you buy now and pay later, helping you take control of big projects like home renovations and even daily expenses.
As convenient as credit cards are, there is no guarantee that you will be approved for your desired credit limit. It can be disappointing to submit an application only to receive a lower credit limit than you expected, and worse, it can put your goals on hold.
On average, consumers who open a store card may only receive a limit between $ 2,000 and $ 2,500, and it may be less than $ 1,000 in some cases, depending on Equifax Credit Trends Report. The average credit limit for general purpose cards was higher, averaging between $ 5,000 and $ 6,000, but it may still be low for your needs.
Creditors look at a multitude of factors when deciding your limit, including their assessment of your credit risk, income level, credit rating, and the issues they see on your credit report, such as high revolving credit card balances, recent inquiries or large loan amounts.
But they also take into account a few completely unrelated factors, like how well the economy was going at the time you applied. There is no way to predict exactly how much you can expect to be approved.
It can be disappointing to get a low credit limit, but you’re not entirely without options. After a few months, consider requesting a credit limit increase on your new card, or you can request a higher limit on a card you’ve had for a while.
Here’s a breakdown of how credit limit increases work and how you can apply for one.
Credit limit increases can happen automatically for long-time customers on occasion, or you can request one manually if you’ve only been a customer for a few months.
Card issuers have been known to automatically increase cardholder credit limits from time to time (with no effect on your credit score), especially if you keep your income information up to date and have a good payment history.
However, not everyone will benefit from an automatic increase. And even if you get a higher credit limit, you may not get the increase you need. It may therefore be a good idea to apply for a larger credit limit yourself.
Before jumping into your application, consider the three qualifications:
- You usually need to have been a card holder for at least three months.
- You can usually only request a raise once every six months.
- Card issuers can review your credit report if you request a specific credit limit.
These rules may not be a problem for you, but if you have bad credit or if your score is under review (you’re on a mortgage or applying for a new apartment, for example), consider not submitting a credit limit increase to preserve your credit score (we explain why below).
When you are ready to request a credit limit increase, you will have the option to complete the request online or over the phone. You can submit the request through your card issuer’s mobile app or by logging into your online account.
Another option is to call customer service and ask for a raise. This option gives your request a personal touch and allows you to explain why you need a higher credit limit and to reassure yourself that you can pay it off. Discussing a recent raise or a long-standing positive relationship can help boost your chances of getting a raise.
Asking for a credit limit increase can hurt your credit rating by a few points if the card issuer withdraws your credit. credit report. It is essential to check the form online or ask the representative if your credit report will be reviewed.
Before starting your request, gather this information:
- Annual revenue
- Employment status
- Monthly housing payments (rent or mortgage)
- New desired credit limit, which some issuers allow you to enter when requesting
You can usually expect to receive an instant decision on whether to approve or deny your credit limit increase.
If your request was denied, you may have to wait up to six months before trying again. While you are waiting, try to increase your credit score through one-time payments and increase your income, so you can increase your chances of being approved next time. You can also improve your credit score by Experian Boost ™, which allows you to get credit for on-time payments over the phone, utilities, and streaming services.
On the secure Experian site
Increase in average credit score
10+ points, although results vary
Affected credit report
Credit rating model used
Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.