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Increasing your credit card limit can boost your spending availability on credit. You may even receive an offer from your credit card issuer for a credit limit increase. But can your creditor increase your credit limit without notifying you first? Or is your consent required before they increase your limit? 


Key Points

  • Your credit card issuer must get your consent before they increase your credit limit.
  • Creditors may offer a pre-approved credit limit increase if you’ve been managing your credit account responsibly.
  • If you want your credit limit to increase, you may request an increase with your creditor, though a hard credit check may be required.
  • If you’re mismanaging your credit card account or don’t use it, your creditor may decrease your credit card limit without notice or your consent.

No, your credit card issuer cannot increase your credit limit without your explicit consent. Creditors must always ask for your permission first before raising the credit limit on your card. 

The Government of Canada sets specific regulations when it comes to consumers’ awareness of credit limit increases initiated by financial institutions. The regulations state the following:

  • The financial institution must obtain explicit consent from the borrower each time they increase their credit limit. 
  • If the borrower gives consent to a credit limit increase orally, the financial institution must submit confirmation of that consent to the borrower in writing, either in paper or electronic form. The confirmation must be provided to the borrower no later than the date of their next credit card statement.
  • The borrower’s use of the credit card does not constitute consent to credit limit increases.

The above rules act as a safeguard to borrowers, offering them full transparency about changes made to their credit limits so that they can assess the implications for their finances. 


What Happens If Your Bank Pre-Approves You For A Credit Card Limit Increase?

A pre-approved credit limit increase is when your credit card issuer offers to raise your credit limit without the need for you to apply. These offers are typically extended when you’ve demonstrated a strong payment history, responsible credit card usage, and a healthy financial profile.

You have the freedom to choose whether to accept or decline an offer to have your credit limit increased. You may consider accepting if you think you may need a higher limit to accommodate a larger purchase in the near future.

However, you may decline if you are tempted to overspend, or a hard credit check may be required. Turning down a pre-approved credit limit increase will have no negative impact on your credit health. 

Note: Odds are, the creditor may have already done a soft credit check, which has no impact on your credit score. Hard credit checks are typically not necessary for pre-approved credit limit increases. However, you may still want to confirm with your creditor before accepting their offer.

What Happens If You Accept The Pre-Approved Credit Limit Increase? 

If you accept a pre-approved credit limit increase, it may take a couple of days before you see the increased limit applied to your credit account after you’ve provided consent. Once the new credit limit takes effect, you’ll see it on your next credit card statement. 

Keep in mind that creditors can revoke their offers for credit limit increases if anything about your financial or credit profile changes after the original offer is made, even after you’ve accepted it. 

While pre-approved credit limit increases typically don’t involve a hard credit check, some might. It’s important to verify with your creditor whether a hard credit pull is required, as it can have a negative effect on your credit score, though only temporarily. That said, a credit limit increase can help boost your credit score by lowering your credit utilization ratio.

How To Accept A Credit Limit Increase?

If you’ve reviewed the offer and verified that a hard credit check is not required, you may accept the offer in one of the following ways:

  • Online Banking: Log in to your online banking account to accept the offer.
  • By Phone: Call your creditor and speak with an agent over the phone. 
  • In Person: Visit a local branch to accept the offer in person.

What Happens If You Turn Down A Credit Card Limit Increase?

You can decline a credit limit increase if your creditor offers one without suffering any negative consequences. Your credit score will not be affected, and you can still continue to use your credit card and spend against your existing credit limit as you have been.

Unless you consent to the offer, your credit limit will not increase, and nothing will change in terms of your credit usage and credit score.  


How To Get A Pre-Approved Credit Limit Increase

Pre-approved credit limit may reach out to their clients and offer an increase to their credit limits for a handful of reasons:

  • Make Your Payments On Time: If you’ve paid your credit card bills on time on a consistent basis and kept your credit utilization ratio low, the creditor may offer you a higher credit limit.
  • Increase Your Spending (Within Reason): If you’ve shown a pattern of spending a lot on credit, then quickly made payments to cover your expenditures, the creditor may view this as a need for more credit. It’s important to note that prompt repayments are key here, as creditors want to see that you’re able to handle your credit expenses. 
Why do creditors offer pre-approved credit limit increases?
The answer is simple: They want to keep your business. Creditors want to retain their clients, and one way to do that is to reward them with perks like credit limit increases. Plus, if you’re carrying a high balance and may be tempted to transfer your balance to another creditor, offering you a higher credit limit may be a good way to keep you with them.

Benefits Of Accepting A Pre-Approved Credit Card Limit

An increase in your credit limit confers numerous benefits:

  • Lower credit utilization ratio: An increase in your credit limit will lower your credit utilization ratio. This ratio is a key factor assessed by credit rating agencies like Equifax and TransUnion to assign your credit score. A lower ratio increases your credit score, making it easier to get approved for mortgages, personal loans, auto loans, etc.
  • Great for emergencies: The more sources of cash you have access to, the better. Situations may arise where you suddenly need a large infusion of cash, perhaps to pay for an unexpected expense. A higher credit limit provides you with access to extra money, should you need it, without relying on an emergency fund or loan.
  • Alternative to opening a new credit card account: Opening a new credit card account will effectively shorten the length of your credit history. This is bad for your credit score because it shortens the average age of your credit accounts. If you need more credit, you may be better off increasing your credit limit instead of applying for a new card to obtain more credit. 
  • More rewards: An increase in your credit limit provides you with more spending power, which is advantageous if your credit card offers a rewards program. By moving more of your daily spending to your credit card, you can earn more points or receive more cash back.

Drawbacks Of Accepting A Preapproved Credit Card Limit

While an increase in your credit limit comes with many advantages, you should also be aware of the pitfalls.

  • More debt: If you’re supplied with extra spending capacity, you may be tempted to purchase more than you usually would, which can increase your debt load. If you’re already experiencing trouble paying off your existing debt on time, an increase in your credit limit can exacerbate the problem.
  • Hard inquiry: A hard check may be required if you request a credit limit, which can temporarily pull your credit score down. However, if your creditor is offering a pre-approved credit limit, then a hard credit inquiry may not be required.

Can Your Credit Card Issuer Decrease Your Credit Limit Without Notice?

It’s possible for credit card issuers to reduce your credit limit without your consent. This may be applicable in the following cases:

  • Late Payments: If you consistently miss your payment due dates, your creditor may reduce your full credit limit as a result. 
  • High Credit Utilization: Spending much of your credit limit on a regular basis will increase your credit utilization ratio. In this case, your creditor may reduce your limit to limit their risk. 
  • Lack Of Card Use: If you’re not using much of your credit amount, the credit may think you don’t need the full credit limit and may reduce it as a result. And if you go a prolonged period without using your card, the creditor may deem your account inactive and may subsequently reduce your credit limit.

Learn more: Why Did My Credit Limit Decrease?


Should You Accept A Pre-Approved Credit Card Limit Increase?

If your credit card issuer offers you a credit card limit, you may be tempted to accept. But before you do, you may want to take some time to assess your situation and weigh the perks and drawbacks of a credit limit increase first.

When It May Be Worth Accepting A Pre-Approved Credit Limit Increase

Consider accepting your creditor’s offer in the following circumstances:

  • You’re Responsible With Your Credit Card Usage: If you’ve been making your credit card payments on time and in full every month, and feel confident that you’ll continue to do so, then a higher credit limit may further help keep your credit utilization low. This can help maintain a good credit score. 
  • You Anticipate Making Larger Purchases In The Near Future: A higher credit limit gives you more spending ability, which can be particularly useful if you plan to make an expensive purchase at some point or want to have an emergency financial backup. 
  • No Hard Credit Check Is Required: Pre-approved credit limit increases typically don’t require hard credit checks. However, it’s still a good idea to double-check with your creditor, as some may require one.

Why You Shouldn’t Accept A Pre-Approved Credit Limit Increase

You may want to think twice about accepting your creditor’s offer if the following apply:

  • You Tend To Overspend: If you lack financial discipline and are often tempted to overspend, then you may want to turn down your creditor’s offer to increase your credit limit  
  • A Hard Inquiry Is Required: Although hard credit inquiries are somewhat uncommon with pre-approved credit limit increases, they are still possible. If you confirm with your creditor that a hard credit pull will be required, this can hurt your credit score temporarily. In this case, you may want to think twice about a limit increase.
  • You’re Applying For An Important Loan In The Near Future: If you plan to apply for a big loan, such as a mortgage, some time soon, your credit card limit can potentially affect your ability to qualify.  Lenders may calculate your borrowing power based on the possibility that you may spend up to your credit card limit. 

How Much Credit Card Debt is Normal?

Keeping your credit card debt low will help you better manage your finances while protecting your credit score. As far as what would be considered a ‘normal’ level of credit card debt, there is no precise dollar figure. Instead, it’s more helpful to understand your credit card balance in relation to your credit limit and your finances. 

Ideally, your credit utilization ratio should be no higher than 30%. In other words, your credit card balance should not be more than 30% of your credit limit. So, for example, if you have a $10,000 credit limit and your balance is $2,500, your ratio would be 25%, which would be considered healthy.

You should also consider how manageable your credit card bills are and whether you rely too heavily on your credit card for essential expenditures. If these factors become problematic, you’re likely carrying too much credit card debt and should take steps to bring your balance down.


Final Thoughts

Credit card companies in Canada cannot increase your credit limit without your consent. There are regulations in place governing financial institutions’ discretion in raising customers’ credit limits. You have the right to choose whether you wish to have your credit limit increased. As a result, you can plan your budget with the knowledge that there are additional controls in place to curb those occasional moments of excessive spending.


Increase Credit Limits FAQs

Why did my credit limit increase automatically?

Your credit card provider may offer you an increase in your credit card limit as a reward for responsible credit usage, such as timely bill payments and maintaining a low credit utilization. However, they must get your consent before increasing your limit.

How do you get a credit card company to offer you a credit card increase?

To get an offer for a credit limit increase, keep your credit utilization low and maintain a positive payment history. With a strong credit profile, your creditor may be more willing to increase your credit limit when requested. If your credit profile is particularly healthy, your credit card issuer may provide a pre-approved limit increase. 

Will accepting a higher credit card limit improve my credit?

Accepting an increase in your credit limit will reduce your credit utilization ratio, which can improve your credit score. However, if your card issuer performed a hard credit check on your credit report, your credit score will decrease slightly. 

What’s the average credit card limit in Canada?

According to the Bank of Canada, the median borrowing limit among Canadians who pay their credit card balance in full is $9,000, and the median limit among those who carry an outstanding balance is $16,000.
Mark Gregorski avatar on Loans Canada
Mark Gregorski

Mark is a writer who specializes in writing content for companies in the financial services industry. He has written articles about personal finance, mortgages, and real estate and is passionate about educating people on how to make smart financial decisions. Mark graduated from the Northern Alberta Institute of Technology with a degree in finance and has more than ten years' experience as an accountant. Outside of writing, he enjoys playing poker, going to the gym, composing music, and learning about digital marketing.

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