Everything You Need to Know About Increasing Your Credit Limit
Highlights from this article:
A credit limit increase may reduce your credit utilization, which can benefit your credit score.
Credit limit increases come with risks, and may become a financial liability.
If you typically carry a balance from month to month, a credit increase may not be right for you.
Increasing your credit limit is pretty easy. But because it can affect your credit score and your overall finances, it shouldn’t be an automatic decision.
Here’s how do to it — and how to decide whether you should.
How to get a higher credit limit
Make a request
Many credit card issuers allow their cardholders to ask for a credit limit increase either online or by phone. In either case, you may have to give a reason for your request or provide proof that your income has increased.
Wait for an increase
Some banks and credit card companies give cardholders an automatic credit limit increase after they’ve had a card for a while and have used it responsibly. You must give your permission before an increase can be implemented.
Apply for a new card
If you’ve had a responsible run with your current credit card, you could be approved for a new one with a higher credit limit. Even if the new card’s limit isn’t higher than your current one, having an additional card still increases your overall available credit.
Reasons to raise your credit limit
Reducing your overall credit utilization
Having more credit to your name will impact your credit utilization, or debt-to-credit, ratio.
This is a percentage-based measurement that represents how much of your available revolving credit you’re using at any given time. A lower credit utilization ratio may positively impact your credit score.
“With more available credit, if you’re able to keep your utilization under 30%, your credit score should increase in the long run,” Janine Rogan, a Calgary-based Chartered Professional Accountant, said in an email.
If you typically charge $500 per month on your credit card, and your credit limit is $1,000. Your credit utilization is 50%, which is well above the recommended threshold. If your limit goes up to $5,000 and you still spend the same $500 a month, your utilization drops to 10%..
The lower your debt-to-credit ratio, the more favourable you appear in the eyes of potential lenders.
A bigger cushion for financial emergencies
A dedicated emergency fund is ideal for significant, unexpected expenses. But not everyone has the resources to save the three to six months of living expenses most financial experts suggest we sock away.
Extra room on your credit card may offer additional peace of mind in a financial emergency, even if you don’t end up putting it to use.
More purchasing (and points earning) power
A higher credit limit means greater purchasing power. So long as you use your extra credit responsibly, it could come in handy — expecially if you have sizable expenses like a vacation or home repairs on the horizon.
Rogan points out that a higher credit limit offers more room for big-ticket purchases and their accompanying rewards points.
But you need to have a plan to pay down the resulting balance to avoid overextending your finances and paying interest that can reduce the value of your credit card rewards.
Reasons to maintain your current credit limit
The risk of overspending
More credit means extra spending bandwidth — and the potential for debt.
“Overspending or living beyond your means is a big risk when accepting more of a credit card limit increase,” said Rogan. “It can be dangerous if you find yourself swiping too freely.”
Twenty percent of Canadians who say they used a credit card for essential purchases in the past 12 months did not pay their balances in full each month, according to NerdWallet Canada's 2026 Consumer Credit Card Report.
If you’ve struggled with impulse spending or recurring debt, a larger credit limit may not be a practical choice.
Impact to your credit mix
The number and variety of credit accounts you carry factors into your credit score. The ideal credit mix is a diversified one.
If your credit card is the only form of credit you carry, consider alternate forms of borrowing before you expand your card limit.
Personal loans and lines of credit may be worth considering, especially if you tend to carry a balance on your credit card. Credit card debt can be expensive. Alternative borrowing options may offer lower interest rates while helping diversify your credit mix.
If you already have a healthy, diverse spread of credit accounts, a larger credit card limit may be fine.
Frequently asked questions
What is a credit card limit?
A credit card limit is the maximum amount you can charge to a credit card at any given time.
Credit card limits can be as low as $500 (for student cards or cards for those without a long credit history) or upwards of $50,000 (for premium cards).
Your credit limit is typically determined by things like your credit rating, your income and your payment history.
What’s a good credit limit?
There is no such thing as a universally agreed upon “good” credit card limit. A good credit limit is one you can manage.
Low limits are sensible for people without a lot of experience using credit cards. Higher limits are generally better suited for people with a history of managing their credit card debt.
How can I increase my credit limit?
If you need a credit limit increase, you can reach out to your credit card company to request one. Otherwise, you can wait until your credit card company or bank offers one.
Canadian credit card issuers are not permitted to increase your credit card limit without your express written or verbal consent.
Can I lower my credit limit?
Yes. Lowering your credit limit can be a wise move if you’re regularly overspending due to credit card use.
Just contact your bank or credit card company and initiate the request.
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Shannon Terrell
Sandra MacGregor
Shannon Terrell
Clay Jarvis