This Is What Happens to Your Credit Limit Based on How You Spend

Credit card issuers put new users on short leashes. My first credit card issuer, Discover®, lent me a measly $500 credit line for my first card -- table stakes in the credit card universe. But your credit card limit rarely stays the same. It changes based on how you spend.

In 12 months, Discover extended my credit limit from $500 to $1,500 without any effort on my part. It was automatic. Your credit issuer will likely increase your credit line -- assuming you use your card responsibly. Here's what to expect based on how you spend.

Your credit issuer may boost your credit limit

If you pay your bills on time, your credit issuer may boost your credit limit automatically.

Issuers typically review your status every six to 12 months. If they like what they see, they may extend your line of credit. Over time, boosts add up. My oldest card limit grew from $500 to $9,000 over seven years of fairly consistent use.

If your income goes up, credit issuers may boost your credit limit. The more money you make, the more likely you are to pay off your card, or so the thinking goes. Issuers also consider your debts, how often you use your card, and credit limits on your other cards.

New credit card limits may start out higher

New credit limits may start higher. My first credit card start limit was $500, my second was $2,500, and my third was $7,300. That's because I've established a long history of credit card use, one collected on my credit report. Issuers check these reports when determining limits.

The best way to spiff up a credit report is to pay bills on time and follow other credit score best practices, like using no more than 30% of your total credit limits at any time. The longer and stronger your credit history, the higher your limits.

Your credit issuer may shrink your credit limit

Your credit card issuer may shrink your credit limit if your income goes down, you make late payments, or you increase your credit utilization.

Generally speaking, you want to avoid making late payments. They hurt your credit score, which issuers use to determine your credit limit. It's best to pay 100% of credit card bills monthly, though it's better to make minimum payments than late payments.

A high credit utilization ratio (aka: how much credit you're using) tells card issuers you may be a credit risk. Use no more than 30% of your total credit card limits to keep it low. If you have two credit cards with $5,000 limits each, use at most $3,000 between the two to keep your credit score healthy.

How to ask for a credit limit increase

You can also ask your card issuer for a credit limit increase. Before you do, make sure it's been at least six to 12 months since opening your credit account or since you last requested a credit limit increase. Otherwise, you'll probably be denied.

How to manually ask for a credit limit increase:

1. Call a credit card representative.
2. Ask for a credit limit increase.
3. Provide requested personal information like income, mortgage payments, and desired credit limit.

Some credit card issuers, like Discover, let you request limit increases online or through their app. Others, like Chase, prefer that you call. Have your details handy to save time. If denied, you can typically try again in six to 12 months.

You can increase your credit limit passively by reporting higher income, paying off debt, and paying off credit cards on time. Or you can actively request an increase. Calling a representative may be worthwhile if you think you deserve a higher credit limit.