There is no arguing that life can be costly, and it only seems to become more expensive as the years pass and your responsibilities grow. Credit cards can be an enormous help in meeting life’s expenses, but your credit limit may limit how much room you have to grow. Credit cards are a fantastic resource, but every card has a credit limit that determines how much you can spend, which is called your credit limit. The good news is with responsible and proper usage, you can raise your credit limit over time, giving you a bit more financial freedom. But how do you raise your credit limit? Keep reading for a complete breakdown.

Consider the alternatives

It is easy to fall into a routine of using your card and paying it off every month, especially if you’re automatically paying your monthly bill. This kind of hands-off approach to managing your credit card is a great way to build credit, but it can mean missed opportunities with other issuers. That’s because if you have a great payment history, you could be an excellent candidate for a new credit card. Even better, sometimes credit card issuers will offer special incentives for new customers, like cash back rewards or a lower interest rate. You could earn rewards on everyday purchases like groceries and gas, or you could earn rewards that you can later redeem for travel.

Before applying for any new card, you’ll want to take the time to shop your options carefully. Some issuers have particular requirements for new applicants, such as a specific credit score or an established credit history. You’ll want to have a complete understanding of such requests before you apply for the card. Not sure where to look? Our credit card reviews detail the credit range for each card. We also note all of the card’s fees and terms in our reviews.

Also, keep in mind that federal regulations require you to provide specific details, such as your monthly housing payment and annual income, when you apply for a card. This means you’ll want to gather such information before you apply. It should be noted that your monthly income does not only include your regular pay from work, but it also includes any retirement or dividends, public assistance payments, and any shared income. Alimony and child support are optional for your application.

Steps to raising your credit limit

If you determine a new credit card isn’t right for you, you’ll want to contact your current issuer to ask for a credit limit increase. If that’s the best route for you, follow these steps:

Consider your timing

When it comes to your credit, it’s true that timing is everything. If you recently received a promotion or raise at work, it could be an excellent time to request an increase. Creditors will not only ask for your income, but they will also pull your credit reports or scores — or both — to get a complete view of your credit. Issuers also want to confirm that even if you have the funds, you will use them to repay your debts. Your credit card payment history and overall credit history will demonstrate whether you have a track record of making timely payments and meeting your financial obligations.

Prepare your records

Before requesting a credit increase, be sure to update all of your information with your issuer, so your credit card issuer has the most current and accurate information. After all, that’s a piece of the puzzle they’ll look at to determine if you should get a credit limit increase or not. You’ll also want to review your account to see where you stand. For example, if you owe $4,500 on a card with a $5,000 credit limit, your issuer may not be willing to raise your credit limit. On the other hand, if you owe $50 on a card with a $5,000 credit limit, they may be willing to give you access to more credit. We should note that credit card issuers will sometimes approve you for a credit increase automatically. If such an increase occurs, you should be alerted via the mail and you’ll see the credit line increase appear on your monthly statement.

Contact customer service

Many credit card issuers require a quick online form to begin the process of raising your credit limit. For even faster service, you can call customer service directly to find out if you are eligible for a higher credit limit. A customer support representative will be able to review your account in detail and assist you with the application process if one is required. Some issuers also offer online chat representatives for even faster service.

Stay informed

If you are denied for a credit limit increase, it is crucial to understand why you were turned down. Many factors impact a bank’s decision, and if you know what factors formed its decision, you can better prepare yourself for approval in the future. Credit card issuers may open a hard inquiry of your credit report before making a decision, and that can affect your credit score. If your issuer pulls your credit history, you’ll want to wait a couple of months before you apply for a new credit card, mortgage or any other line of credit. That’s because numerous inquiries on your credit can not only lower your credit scores, but also make you look desperate for credit.

When is the right time to ask for a credit limit?

If you have an excellent payment history and a good credit score, it could be the right time to request an increase in your credit score. Credit card issuers are more likely to approve credit limit requests when you have a recent increase in income or if you have a lower debt-to-income ratio (meaning you paid off all of your debt). It is also a good idea to explore your options by looking into other credit cards and see if it may just be time to get a new credit card. After all, other issuers may end up offering a better deal that works you better for you today.