How to Get a Credit Limit Increase in Canada (and When to Ask)

A credit limit increase gives you more room on the card you already have. Used well, it lowers the share of your available credit you’re using, which can help your credit score. Used badly, it’s just more room to carry an expensive balance. In Canada, your card issuer needs your consent before it raises your limit, so you’re always in control.

Why your limit matters

Your credit limit affects your credit utilization: the balance on your cards compared with your total limits. If you have a $1,000 limit and a $600 balance when your statement is issued, you’re using 60%. With a $3,000 limit and the same $600 balance, you’re using 20%. Lower utilization is generally seen as less risky, and it’s one of the factors that feed your credit score. See how credit scores work for the full picture.

A higher limit also helps with practical things: booking travel or a hotel that places a hold, or putting a big purchase on a card with purchase protection.

Starting limits can be small. Scotiabank lists a $500 minimum credit limit on the Scene+ Visa, and CIBC’s student cards list a limit of up to $5,000 for Canadian students and up to $2,000 for international students.

Your right to consent

The Financial Consumer Agency of Canada (FCAC) notes that federally regulated issuers must get your consent before they increase your credit limit. They can offer you an increase, but they can’t simply raise it. You can also ask for a decrease at any time.

When to ask for an increase

You’ll usually have a better chance after:

• Several months of on-time payments on that card.
• A raise or a new job. Higher income supports a higher limit.
• Paying down other debts, so you’re carrying less overall.

It’s usually better not to ask right after opening the card, right after missing a payment, or when you’re relying on the card to cover essentials you can’t pay off.

How to ask

Most big banks let you request an increase in online banking or the mobile app, or by calling the number on the back of the card. Be ready to give:

• Your current annual income
• Your employment details
• Your monthly housing cost
• The limit you’d like

Ask the issuer whether the request will involve a hard credit check. Some do one, which appears on your report as an inquiry; others review your account history without one. If it will be a hard check, ask only when you’re fairly sure you’ll be approved.

When a higher limit is a bad idea

If you carry a balance from month to month, more credit can mean more interest. Purchase rates on many rewards cards are around 20% to 22%. For example, the TD Rewards Visa lists 21.99%. At those rates, extra room can get expensive quickly.

If you’re paying down debt, focus on that first. A low-rate card such as the Scotiabank Value Visa (13.99%, $29 fee) or a balance transfer may help more than a higher limit. See our guide to balance transfers.

Other ways to improve your utilization

• Pay before the statement date. Utilization is usually based on the balance reported when your statement is issued, so paying part of it earlier can lower the number the bureaus see.
• Spread spending across two cards if you already have them.
• Keep old cards open, especially no-fee ones, since closing a card removes its limit from your total.

FAQ

Does asking for a credit limit increase hurt my score? Only if the issuer does a hard credit check. Ask before you submit the request.

Can my bank raise my limit without asking? FCAC says federally regulated issuers need your consent before increasing your limit.

Can I lower my credit limit? Yes. Contact your issuer. It can be a good idea if a high limit makes overspending tempting, though it may raise your utilization.

What to do next

If you need a card with a low rate rather than more room, compare the low interest hub. If you’re just starting out, the no annual fee hub lists cards that are easier to hold long term.

This is not financial advice. Approval is never guaranteed.