How to Increase Your Credit Card Limit? Learn What Is Required

Having a credit card with a limit that suits your financial needs can indeed be an advantageous way to facilitate purchases and organize your finances.

The initial limit offered by banks is not always sufficient for the cardholder, which leads many people to seek ways to increase it.

If you’re in Canada and are not satisfied with the limit available on your card or need a higher limit for a specific goal, understanding how to increase your card limit is key to achieving your objectives.

Follow this guide, where you’ll learn everything about how to increase credit card limit, the necessary conditions for it, and how to maintain a good reputation with your card issuer.

When Is It Advisable to Request a Limit Increase on Your Credit Card?

Knowing the right time to request a credit card limit increase is as important as knowing how to do it. Asking for a limit increase may be advisable in several scenarios. Check them out:

When Your Income Increases

Have you recently received a raise or secured a new source of income? This could be a good reason to request a higher limit.

With a higher income, credit card issuers will have more confidence in granting you an increase in your credit limit, as your risk profile decreases.

When You Have Large Purchases Planned

Are you planning to renovate your home or buy a high-value item?

Increasing your limit is a solution to consolidate these expenses on a single card and still take advantage of benefits like rewards programs.

When You Need to Improve Your Credit Score

Having a higher credit limit helps reduce your recurring card usage, an important factor in your credit score.

Remember, it’s very important to use this new limit responsibly to avoid debt.

After a Consistent Payment History

If you have a positive payment history, always paying your bills on time, it may be a great time to request a credit limit increase.

Card issuers typically view customers who keep their accounts in good standing favorably.

Can Requesting a Limit Increase Affect My Credit Score?

Yes, the process of increasing your credit card limit can impact your score in two ways: positively and negatively. Let’s look at the details of these impacts.

Positive Impacts

• Reduction in Credit Utilization: One of the most important factors affecting your credit score is the ratio between the amount spent and the available limit, known as credit utilization. When you increase your limit and maintain the same spending level, you reduce this ratio, which improves your score.
• Building a Positive Credit History: With a higher limit, as long as it’s used responsibly, you show issuers and credit agencies that you can manage a higher credit line, which positively impacts your score.

Negative Impacts

• Hard Credit Inquiry: Depending on the financial institution, when you request a limit increase, a hard inquiry on your credit history may be conducted, which can result in a temporary score drop. This impact is usually short-term and only happens when the inquiry is performed.

How to Increase Your Credit Card Limit Easily?

Now that we understand when it’s advisable to request a credit increase and how it can affect your score, let’s explore the easiest ways to increase your card limit.

Submit an Online Request

The most common and practical way to request a limit increase is through your bank or credit card issuer’s digital channels. Just follow these basic steps:

• Access your online account: Log in to your bank’s app or website and navigate to the credit card section. Usually, there’s a clear option to request a limit increase directly from the control panel.
• Fill in the required information: The card issuer may ask you to update your income level and other personal details. These data are essential for the bank to determine if you qualify for a limit increase.
• Wait for approval: In some cases, approval may be automatic. Depending on your spending profile and the institution, the process could take a few days.

Request by Phone

If you prefer more personal service, you can make the request by phone. Most banks in Canada offer a direct line for this type of service. When calling:

• Have your details ready: Make sure you have your card number and updated financial information, such as recent income proof.
• Explain the reason for the request: Be prepared to justify why you want to increase the card limit, such as an income increase or the need to make a larger purchase.
• Wait for review: Depending on the bank, the response could be immediate or require a more detailed review of your history, which may take a few days.

Set Up Automatic Payments

Your chances of getting a higher limit increase when automatic payments are set up on your account.

Demonstrating financial responsibility and ensuring you never miss a payment due date is a crucial factor for your credit card issuer.

By setting up automatic payments, you also make it easier to manage your finances and avoid accumulating interest charges due to late payments.
The more reliable you are with your payments, the more confidence the bank will have in granting you a higher limit. Don’t forget that!

Request a New Card

If you’ve already tried increasing your current card limit and were unsuccessful, the solution may be to apply for a new card with a higher limit.

Several institutions in Canada offer cards with different limit levels, and some are specialized in serving clients with specific credit profiles.

Next, read the main tips to increase your chances when applying for the new card.

• Choose a card suited to your profile: There are cards for different client profiles, from those seeking rewards to those focused on rebuilding credit. Choosing a card more aligned with your financial profile increases your chances of getting a higher limit.
• Research fees: Before applying, compare the annual fees, interest rates, and benefits offered by different card issuers. By doing so, you ensure you’ve chosen a card that truly meets your needs.

What to Do When the Request is Denied?

If, after following all the steps, your request for a limit increase is denied, don’t be discouraged.

There are some actions you can take to improve your chances of getting an eventual limit increase in the future.

• Review your credit score: Often, the reason your request was denied is related to your credit score. By improving your score, whether by paying off old debts or reducing credit utilization, you also increase your chances in future attempts.
• Apply again after a period: Some institutions have a waiting period before you can request an increase again. Use this time to improve your financial history.
• Talk to customer service: If you don’t understand the reason for the denial from the issuer, call your bank’s customer service and ask what can be done to improve your chances in the future.

Practices to Build a Good Reputation with Your Card Issuer

Maintaining a good reputation with your credit card issuer is essential to increase your chances of getting a higher limit. Here are some recommended practical tips for you:

• Pay your bills on time: Never miss your bill due dates. Late payments are viewed negatively and can hurt your chances of a limit increase.
• Use credit sparingly: Even if you have a high limit, avoid using more than 30% of the available credit. This helps keep your credit utilization low, which is good for your score.
• Keep your account information updated: Inform your bank whenever there are changes in your income or employment status. This can help when requesting a limit increase.

By following these tips, you can efficiently increase your credit card limit, ensuring your card better suits your financial needs.

Also, read our post about no-annual-fee credit cards in Canada, detailing each fee and its purpose.