Should you ask for a credit card limit increase in today's economy?

CBS News

16 hours ago

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Credit card users should carefully consider their circumstances before requesting an increase to their card limit right now.
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Making predictions about the economy is always difficult, but particularly so right now.
Inflation just rose in May, after declining in the months prior. Interest rates remain frozen at a high level, after being cut multiple times in the final months of 2024. Unemployment remains steady, but geopolitical tensions and concerns over economic policies at home have raised the financial stress for many. And this all comes as credit card debt balances have increased year-over-year, and the average credit card interest rate is hovering around a record high.
Considering these economic factors, then, and the chances of any material financial relief on the horizon, many credit card users may be contemplating requesting a card limit increase. After all, increasing your credit card limit could be the difference between being able to make ends meet and not. But it also could put you in a worse financial position than you're in currently, making this an important consideration to get right.
The answer, however, isn't particularly clear. Below, we'll break down what to consider before formally submitting your request in today's economy.
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Should you ask for a credit card limit increase in today's economy?
Not sure if requesting a credit card limit increase is the right move to make now? Here's when you shouldn't (and should) consider it in today's unique economic landscape:
When you shouldn't ask for a credit card limit increase in today's economy
If you're one of the average credit card holders right now, saddled with a credit card debt of $8,000 approximately, then you probably shouldn't ask for a credit card limit increase. A credit card debt balance of this amount indicates an inability to manage your debt load appropriately.
And, while that's a red flag in any economic climate, it's particularly troubling considering that the credit card debt compounds daily for borrowers and, more importantly, that the average credit card interest rate is around 21% now, just under a record high of 23% that was reached last year. That's more than $21 in interest for every $100 borrowed. So, even if you're approved for a credit card limit increase (which may not be likely if you have this borrower profile), it's likely not a good idea to pursue it.
Instead, consider evaluating the reasons why you got yourself into this situation to begin with — and look for ways to reduce what you owe cost-effectively and rapidly. There are multiple debt relief options available, ranging from debt management programs to credit counseling to credit card debt forgiveness (which you may qualify for if you have the average debt amount of $8,000 or more).
You won't know which debt relief option works best for your situation, however, until you explore all your potential resources. Just don't wait too much longer to act, either. It may have been easy (and quick) to accumulate this much debt, but the process of paying it down will take time and due diligence. It makes sense to pivot from a credit card limit increase request, then, to focus on paying off all you owe instead.
Explore your top credit card debt relief options here to learn more.
When you should ask for a credit card limit increase in today's economy
If you're a responsible borrower with little or no debt who has a plan (and a budget) to account for any intended credit card limit increase usage, then yes, you can feel comfortable asking for a credit card limit increase in today's economy. At the same time, if you fit this credit card user profile and have no debt, do you really need a limit increase anyway?
Remember that a limit increase may not happen quickly. Credit card companies may require you to provide documentation and details surrounding your income, current expenses, and employment (among other items). There also may be some (slight) damage to your credit score. And there's no ultimate guarantee that your request will be approved anyway, especially if you keep your credit card usage limited each month.
In other words, feel free to ask (if you need to), but don't do so without a credible reason and the financial wherewithal to pay off any intended new usage.
The bottom line
There is no one-size-fits-all answer to this question. Instead, as is standard with most financial decisions, it will come down to your personal circumstances, goals and budget. While credit card limit increases can be helpful for some borrowers, they won't be the solution for others (and could be a part of the problem). So take a close look at your financial situation, your intended use of the credit card limit increase, and your ability to pay down anything you borrow to better determine your next steps.