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Should you increase your credit limit?

We'll help you decide if you should increase your credit limit. We'll also tell you how to increase your limit if you decide it's the right move for you.

If you use your credit card regularly, increasing your credit limit could help you avoid penalty fees, earn more rewards points on big ticket items or allow you to consolidate balances onto one card. On the other hand, it can increase your chances of landing in debt and affect your credit score if you’re unable to pay off your balance in full each month. Find out more below.

Should I increase my credit limit?

The answer to that question will depend on how you currently use your credit cards. If you avoid carrying a balance by paying off your credit card bill each month, then it’s worth considering increasing your credit limit. That’s especially true if you find that you want the extra room for big purchases or in case of an emergency.

On the other hand, if you struggle to regularly pay off your balance, or are often tempted to spend more than you should, you should probably avoid increasing your credit limit. You’ll be more likely to spend up to the new limit, and when you can’t pay off your balance, you’ll be further in debt then before you increased the limit.

How to decide if you should increase your credit limit

When you first get a credit card, your provider will usually assign you a credit limit that is affordable for your circumstances. This limit is based on factors including your income, expenditures, existing debt and credit score.

Reasons why you should increase your credit limit

  • It could help your credit score.
    A credit limit increase could help improve your credit score by lowering your credit utilization ratio (the amount of credit used compared to the amount of credit available). So, for example, let’s say you currently have a $500 balance on credit card with a $1,000 limit. In that case, your credit utilization ratio is 50% – which is more than the recommended 30% or lower. If you were to increase your credit limit to $2,000, that $500 balance becomes only 25% of your limit, which could quite positively impact your credit score.
  • Increased spending potential.
    You’ll enjoy greater spending power, because you can make larger purchases without worrying about maxing out your card and incurring an over limit fees.
  • Greater rewards earning potential.
    A higher credit limit means you can use your card for more purchases and maximize the points you earn per $1 spent on a rewards or travel card. An increased credit limit could also help maximize your cash back return.
  • Emergency funds.
    You’ll have greater peace of mind since you’ll have access to more credit should the need arise due to an emergency.

Reasons why you should NOT increase your credit limit

  • If you have a bad credit history.
    When assessing your credit limit increase application, the bank will do a hard pull on your credit. This credit inquiry is then recorded on your credit report and can negatively affect your credit score.
  • Potential rejected application.
    If your request is denied, it will impact your credit score and you’ll have to wait longer before you can apply for another credit limit increase or a for a new card. Lenders tend to get suspicious when they see many credit inquiries made within a short period of time on your credit report.
  • Meeting monthly repayments.
    A higher credit limit also means higher minimum monthly repayments if your intention is to increase how much you spend on the card.
  • Increased debt risks.
    Having a higher credit limit gives you the option to increase your spending on the card. That flexibility could easily lead to more debt if you’re not disciplined or don’t have the money to repay what you spend.
  • Additional cardholders.
    If you share your credit card with additional cardholders, you run the risk that they could max out your new credit limit.
  • Maxing out issuer-specific credit limit.
    If you have multiple cards with the same issuer, it may set a maximum credit limit across cards.

How to increase your credit limit

If you decide that increasing your credit limit is the right financial move for you after all, here’s how to move forward. There are 4 primary ways to request a credit limit increase: online, on the mobile app, over the phone or at a bank branch.

Online

Most issuers allow you to request a credit limit increase online. You can typically make your request by:

  1. Log in to your online banking account.
  2. Select your credit card account.
  3. At this point you may see the option to Increase credit limit directly on the page. Otherwise, you may have to navigate to the account management page to locate and select the option.
  4. As part of your request, you’ll typically need to provide a few pieces of information. This can include:
    • Your total annual income.
    • Your employment status.
    • Your monthly rent or mortgage payments.
    • Your desired credit limit.
    • Your reason for requesting an upgrade.
  5. After you fill out all the required questions and submit your request, you should receive a response shortly after, if not immediately.

Using the mobile app

Mobile banking apps are becoming more common in Canada, and more advanced. Similar to the process you would use to request an increased credit limit online, follow these steps:

  1. Log in to your card issuer’s mobile app.
  2. Open the credit card account.
  3. Navigate to the credit card account management page, and select the Increase credit limit option.
  4. You may have to enter the same information that you would if you were applying online, including:
    • Your total annual income.
    • Your employment status.
    • Your monthly rent or mortgage payments.
    • Your desired credit limit.
    • Your reason for requesting an upgrade.
  5. After you’ve supplied all of the required information and submitted your request, you’ll likely receive a response wither immediately or within a short period of time.

Over the phone

Making a credit line request over the phone is similar to making a request online. You’ll need to:

  1. Call your issuer and request to speak with a representative. Depending on your issuer, there might be a specific line to call to make this request.
  2. Answer a few questions similar to making your request online. The difference here is you’ll be speaking with a representative instead of typing your answers. Come prepared with your information as well as the reasons you’re requesting an increase.
  3. Wait to receive an answer regarding your request. This should come a few days after providing your information, although sometime the representative might be able to immediately give you a response over the phone.

Here’s how you can contact some of the biggest credit card providers to ask about increasing your credit limit:

Credit card providerPhone number to increase credit limit
Capital One1-800-481-3239
American Express1-800-528-4800
BMO1-800-263-2263
CIBC1-800-465-4653
MBNA1-888-876-6262
RBC1-800-769-2512
Scotiabank1-800-387-6466
Tangerine1-888-826-4374
TD1-800-983-2582

At a bank branch

Requesting a credit limit at a bank branch is very similar to making the request over the phone. Your banking representative will request the same information (e.g. annual income, employment status, reason for the increase, etc.) before submitting your request. They may be able to tell you on the spot whether or not your application has been approved, or you may be notified later with the result.

What factors can affect my credit limit increase application?

Whether you’re applying for a new credit card or an increase in your existing card’s credit limit, your issuer will look at several factors before making a decision. Just about every credit card provider in Canada considers the following when it comes to making credit limit decisions:

  • Your monthly income
  • Your creditworthiness
  • Your employment status (full-time, part-time, self-employed)
  • Your residential status (homeowner, renter, boarder)
  • The card in question (for example, silver, gold, platinum)
  • Your history with the provider in question

Tips for getting approved for an increased credit limit

Once you’ve decided that you should increase your credit limit, there are several things you can do to help your chances of approval before submitting your application.

  • Use your card regularly. Card providers generally favour cardholders who use their cards frequently and pay off their balances on time. This shows them two things: Firstly, that you have a need for a higher credit limit, and secondly, that you can handle credit responsibly.
  • Make payments on time and pay your balance in full. Timely payments greatly improve your chances for approval because they show that you are a responsible and low risk borrower. Paying off your full balance also shows that you’re capable of managing a higher credit card limit.
  • Optimize your credit score. Always protect your credit score by making payments on time. Even late payments on phone and utility bills, or car loans and personal loans can hurt your credit report and deter your credit card provider from increasing your credit limit.
  • Don’t ask too soon or too often. Credit card providers typically review your account after six months. Asking for an increase before that time could raise red flags and hurt your chances of a future credit limit increase. Asking too soon after a previous request can have a similar outcome.
  • Don’t ask for too much. Unless your circumstances have drastically changed, your request should be capped at 30% more than your current limit, however it’s usually better to ask for a conservative 10-25% increase.
  • Apply for a card with a high minimum credit limit. Premium credit cards typically offer higher minimum credit limits than standard cards. If you meet the eligibility requirements for these cards, you could compare your options and apply for one that suits your spending habits and needs.

When should I apply for an increased credit limit?

The best time to apply for a credit limit increase depends on your personal and financial situation. But generally, you’re in a strong situation to make a request when you:

  • Meet the eligibility requirements
  • Have a higher credit score than when you applied for the card
  • Increase your income
  • Plan to close another card and you want to keep your utilization rate low
  • Have a solid record of on-time payments

Consider getting a new credit card instead of an increased limit

If you’ve decided that you should get an increased credit limit, stop and think before applying. Instead of increasing your limit, the smarter move might be to consider getting an entirely different credit card instead. Experts generally suggest having at least two credit cards from different providers in order to have multiple options should an emergency arise and one of your credit cards unexpectedly fails. A different credit card might also give you access to credit card perks and rewards that you can’t get with your current card.

Browse through the credit cards in the table below to find one that best suits your needs.

Name Product Welcome Offer Rewards Purchase Interest Rate Annual Fee Min. Credit Score Description
RBC Cash Back Mastercard
N/A
Up to 2% cash back
19.99%
$0
Min. recommended credit score: 650
Get 2% cash back on grocery store purchases, and up to 1% cash back on all other qualifying purchases and pre-authorized payments.
BMO CashBack Mastercard
5% cash back
Up to 3% cash back
19.99%
$0
Min. recommended credit score: 660
Get 5% cash back on all eligible purchases in the first three months of card membership (up to max. spend of $2,500). Plus, get a rate of 1.99% on balance transfers with a 1% balance transfer fee for nine months.
Scotiabank Passport Visa Infinite Card
35,000 points
Up to 2 points per $1 spent
19.99%
$139
Min. recommended credit score: 750
Earn up to 35,000 bonus Scene+ points in your first year (that’s up to $350 towards travel). Apply by July 4, 2022.
Tangerine World Mastercard
10% cash back
Up to 2% cash back
19.95%
$0
Min. recommended credit score: 600
Earn an extra 10% cash back (up to $100) on up to $1,000 of everyday purchases in the first 2 months Until May 31, 2022. Plus, get a 1.95% interest rate on balance transfers for the first 6 months (valid within the first 30 days of account opening, 1% transfer fee applies).
Simplii Financial Cash Back Visa Card
10% cash back
Up to 4% cash back
9.99% intro APR for the first 6 months, 19.99% thereafter
$0
Min. recommended credit score: 650
Get 10% bonus cash back at eligible restaurants and bars for the first 4 months (up to $500 spend). Plus, get a 9.99% introductory annual interest rate on purchases for the first 6 months.
RBC Avion Visa Infinite
55,000 points
Up to 1 point per $1 spent
19.99%
$120
Min. recommended credit score: 650
Get up to 55,000 Welcome Points. Get 35,000 points on approval and 20,000 bonus points when you spend $5,000 in your first 6 months. Apply by September 16, 2022.
Scotiabank SCENE Visa Card
5,000 points
Up to 5 points per $1 spent
19.99%
$0
Min. recommended credit score: 660
Earn 5,000 bonus Scene+ points when you spend a minimum of $750 on eligible purchases in the first three months as a new SCENE Visa cardholder. Apply by August 31, 2022.
OFFER
Tangerine Money-Back Credit Card
10% cash back
Up to 2% cash back
19.95%
$0
Min. recommended credit score: 600
Earn an extra 10% cash back (up to $100) on up to $1,000 of everyday purchases in the first 2 months Until May 31, 2022. Plus, get a 1.95% interest rate on balance transfers for the first 6 months (valid within the first 30 days of account opening, 1% transfer fee applies).
EXCLUSIVE
Neo Financial Mastercard
Get $25.00
Average 5% cash back
19.99% - 24.99%
$0
Min. recommended credit score: 600
Get $25 when you sign up for the Neo Financial Mastercard. Plus, earn bonuses like 15% cashback on your first purchase at most partners, and earn an average of 5% cashback at thousands of partners and at least 1% cashback guaranteed.
RBC Rewards+ Visa
3,500
Up to 2 points per $1 spent
19.99%
$0
Min. recommended credit score: 650
Earn up to 3,500 RBC Rewards points by going digital in the first 60 days.
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Compare up to 4 providers

What’s the maximum credit limit on credit cards?

Credit card providers will typically want to know what your income and credit score is in order to approve you for a higher credit limit. Many credit card limits can go as high as $20,000 (or sometimes much higher), however you will likely need to meet many requirements for a limit this high including a high minimum annual income, minimum credit score and a long history of repaying on time.

Can I get an increased credit limit without asking?

Yes. Occasionally, your credit card provider may send you invitations to increase your credit limit. You don’t have to accept this offer. However, if you wish to increase your limit, the invitation will provide you with steps to take to accept and implement the credit limit increase. There are a few reasons why you might get an automatic offer for an increased credit limit, including:

  • Competition. From a pure market standpoint, your bank might increase your credit limit simply to keep up with increasing credit limits from competing issuers on similar credit cards.
  • To encourage you to spend. When it comes to issuers, the more customers that carry a balance, the merrier. If your issuer thinks that you’re a good candidate for carrying a balance – with the intent of paying it off eventually – you might see an increase offer your way.
  • Credit utilization numbers. If a bank increases your credit limit but you continue to spend at usual levels, this can look good on your credit utilization ratio. This can ultimately look better on the bank’s end of the numbers.

Should I update my income with my credit card issuer?

If your income has increased since you first got the card, it can be beneficial to update the information for a potential credit limit increase. However, if your income has dropped, reporting your income may cause your card provider to lower your credit limit.

How to update your income for your credit card issuer

The process of updating your income may vary slightly depending on your card provider, but in general, here’s what to do:

  1. Log in to your online credit card account.
  2. Find your personal details option.
  3. Locate your income details.
  4. Enter your new income and submit.

If you can’t find that kind of information in your online profile, then you can try calling your credit card issuer directly to update your income information. By talking to someone directly, you may even be able to get immediate notice of how your credit limit will be impacted.

Bottom line

It’s important to decide if you should increase your credit limit before taking any steps that could harm your credit score. Even if a credit limit increase isn’t on the cards for you yet, the above credit management suggestions are good habits to practice. The underlying principle is to establish healthy credit history by borrowing and repaying responsibly. An increased credit limit may be good to have, but it shouldn’t increase your spending dramatically or negatively impact your ability to repay.

You can learn more about credit cards, including tips to manage your credit card responsibly, in our comprehensive guide to credit cards here.

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