when to request a credit line increasePicture this: you just applied for a new credit card and, to your sinking horror, the credit limit you were approved for isn’t as high as you had hoped. Maybe you wanted to do a balance transfer, or perhaps you just wanted more credit to work with when managing your everyday expenses. Either way, your current credit line is too small for your liking, and you want to do something about it. Can you request a credit limit increase? The answer is yes, but the more important question to ask yourself is, “when is the right time to do so?” Taking on more credit is not to be done lightly, and it’s vital to understand the ways it can impact your finances before you leap into action. Here’s everything you need to know about when and how to request a credit limit increase on your credit card.

How are credit limits decided?

You might wonder exactly how your credit card issuer comes up with the number it chooses when extending your initial line of credit in the first place. During your application for a credit card, a number of factors are weighed by the credit card issuer to make a decision. These include information in your credit reports (which is why a hard credit inquiry is performed), your income and assets and your monthly mortgage or rent payments. Not all of the data in your credit reports matters, but some things are super important when it comes to whether or not you get approved. These are your credit utilization ratio, the number of recent inquiries on your credit reports, any missed or late payments and your length of account history. Every card issuer has its own metrics that are used to determine how much of a risk factor a person is, and those are applied to determine how much credit you’re allotted to start with. There’s no way to really know what that’s going to be when you apply, which can make applying for a credit card feel a little like throwing darts with your eyes closed, hoping you land on a winning number. But the good news is that, once approved, it’s possible to request a bump in your credit limit.

When is the right time to ask for an increase?

Timing is everything, especially when it comes to your finances. You might be tempted to request a credit limit increase right away after you’re approved for your card and it’s not enough, but that’s a mistake. When you request a credit limit increase, your card issuer will likely request that you provide some information about your current financial situation, such as your AIG (adjusted gross annual income), monthly rent/mortgage payments and employment details. If you’ve only just applied, then it’s unlikely that there will be much of a difference between then and now, which means you’re likely to get turned down for your request. The other thing taken into consideration when you request a credit limit increase is your account history (e.g., whether you’ve paid your bill on time, how much of a balance you’re carrying). Again, if your credit card was opened in the past few months, it’s unlikely there will be much for them to evaluate to make a decision. And if you’ve had any problems, like missed or late payments, then you should think twice about making the request.

You should request a credit line increase when …

We list some opportune times to request a credit increase below. Keep in mind that even if you request a credit line increase during the appropriate time, you’re not guaranteed to get it.

  • It’s been at least six months since you opened your credit card account. This gives the issuer time to evaluate your behavior as a customer and be able to better evaluate whether it’s worth the risk of lending you more money.
  • Your financial situation changes. If you’ve recently gotten a promotion that comes with a pay increase or you have more expenses that you’d like to use your credit card to cover (which you can afford to pay), then it’s not a bad idea to request an increase on your credit limit.

Avoid requesting a credit line increase when …

  • You’re close to maxing out your current balance and you can’t afford to pay it off. This might seem like it’s backwards, but if you’re already having trouble paying off what you’ve charged, more available credit isn’t going to be helpful. Instead, it might serve as temptation to rack up more debt. In this situation, if you aren’t in the midst of a 0% intro APR that’s preventing that carried balance from accruing interest, you should consider a balance transfer instead.
  • You’re late on payments. By requesting a credit limit increase, you’re committing to paying any future higher balance(s). When you’re late on current payments, you’re showing the credit card issuer that you’re either unable to pay your current balance or not responsible enough to do it on time. Either way, your request for a higher limit will likely be denied.

Your issuer may increase your credit limit automatically

From time to time, especially if you’ve exhibited responsible payment behavior, your credit card issuer may automatically increase your credit limit without you having to ask. This usually won’t happen instantly, but can happen within the first year after you open your account. It’s important to always keep in mind that more available credit does not mean you should use it — in fact, keeping your balance low or nonexistent is ideal, as this will keep your credit utilization ratio low and your credit scores high. And, on a final note, if your credit limit ends up too high for your liking, you can always contact your provider and request that it be lowered.

To learn more about how to use credit cards to maximize your personal finances, keep reading our credit cards blog.