How To Increase Your Credit Card Limit

There is a maximum amount you can charge to your credit card before it starts becoming declined by merchants. This amount is the credit limit, and knowing how to manage it properly is essential.

Hitting your credit limit frequently can be annoying. More importantly, it is a sign that you may be outgrowing your credit card. But you may not need to get rid of your card yet. Credit limits aren’t set in stone, and it’s likely that you can increase your credit limit.

How to increase credit card limit?

Credit cards come with a credit limit that is set by the bank or card issuer. You can negotiate to increase your credit limit, but only up to a point. This is because financial institutions have to adhere to credit limit guidelines set by the Monetary Authority of Singapore (MAS). 

What is credit limit and how is it calculated?

The credit limit on a credit card is the amount pre-approved by the card issuer for use by the cardholder. The credit is extended without requiring collateral, which makes credit cards a form of unsecured credit facility.

Credit limits are calculated based on guidelines set by MAS. These mainly revolve around income level and age. 

Overview of MAS credit limits for issuance of credit cards

Age	Annual income	Regulatory credit card limit
Up to 55 years old	Between S$30,000 and up to S$120,000	Up to 4 months’ income
	S$120,000 or more (Or net personal assets exceeding S$2 million, or net financial assets exceeding S$1 million)	No regulatory limit
Above 55 years old	Up to S$15,000 (Or net personal assets from S$750,000 to S$2m)	Up to S$2,500
	More than S$15,000 to S$30,000 (Or net personal assets up to S$2m)	Up to 2 months’ income
	S$30,000 to S$120,000 (Or net personal assets up to S$2m)	Up to 4 months’ income
	More than S$120,000 (Or net personal assets more than S$2m)	No regulatory limit

MAS credit limits up to age 55 

Singaporeans 55 years or younger need an annual income of at least S$30,000 to qualify for a credit card. 

With an annual income between S$30,000 to S$120,000, banks are allowed to grant up to 4x your monthly income for your credit card limit. 

For those who earn S$120,000 or more annually, or have net personal assets more than S$2 million, or net financial assets more than S$1 million, there are no regulatory limits on your credit limit. Your bank is free to grant any credit limit at their discretion.

MAS credit limits for those older than 55

Once you reach your 55th birthday, the MAS limit becomes slightly more nuanced. 

Essentially, you’ll still qualify for a credit card based on either your annual income or net personal assets, but will face stricter credit limits if your annual income is below S$30,000 or your net assets is under S$2 million.

Presumably, this is to prevent individuals nearing retirement from taking on too much unsecured debt by recklessly spending on their credit cards. 

Why is your credit limit lower than the MAS amount?

The MAS limits describe the maximum credit limit financial institutions may grant to credit card holders. That does not mean that it is mandatory for card issuers to grant you the highest credit limit available. 

It is common to have a credit limit that is lower than the MAS limit, especially if you are a new applicant that has not demonstrated responsible use of unsecured credit. Another reason could be your credit score isn’t exactly perfect, due to missed payments in the past, or a pattern of fiscal irresponsibility. 

Also, with the Total Debt Servicing Ratio in place, where your total monthly debt repayment (including credit cards) cannot exceed 55%, there is even less reason for banks to grant the maximum credit limit – simply because you likely won’t be using it anyway. 

What about low limit credit cards?

In 2007, MAS granted approval for low limit credit cards to be launched in Singapore. Such cards can only have up to S$500 in credit limit per card. 

These low limit cards are aimed primarily at students and young adults, and come with much lower income and eligibility requirements. In return, the rewards and perks they offer are minimal. 

Three things you can do to increase your credit limit

Update your income information 

If you’re still using a credit card that you got early in your career, the credit limit granted to you would have been based on your salary then. Perhaps you were granted a credit limit equal to 1.5x of your S$4,000 monthly salary, which gives you a S$6,000 credit limit. 

A few years on – provided your income has grown – you can try updating your bank on your new, higher income. This will likely trigger a higher credit limit to be granted to you, since your salary is now larger.

For instance, let’s say your salary is now S$5,000 per month. Even if your bank sticks to the same 1.5x multiplier, this would increase your credit limit to S$7,500.

To update your income information, simply fill up and submit the relevant documents via your mobile banking app, or by contacting your bank. 

Request a temporary credit limit increase

Another way is to request for a temporary credit limit increase. This will trigger a credit limit review by your bank, which may be approved or rejected based on whether your credit card account is in good standing or not. 

If a particularly large increase is requested, your bank may also conduct a credit score check to assess your creditworthiness. 

Just like with updating your income, you can request for a credit limit review through your mobile banking app, or by contacting the bank. 

Make an advance payment

If you have the cash available, you can increase your own credit limit simply by making an advance payment. 

For instance, if your current credit card limit is S$5,000, if you make a payment of S$2,000 into your card account, your credit limit will instantly increase to S$7,000. There’s no need to notify your bank or ask for a review, making this the most convenient and fuss free way to increase your credit limit. 

Obviously, this only works if you have the available cash to spare. A variant on this is to regularly overpay your credit card bills. The difference will accrue in your credit card account and increase your credit limit over time.