How to Increase the Credit Limit on Your Secured Credit Card

You may be able to build or rebuild credit with responsible use with a secured credit card.* As your credit improves, you might require a larger credit line for bigger expenses such as furniture, a laptop, or car repairs. Here are some tips on how to increase your secured credit card limit.

How is the Credit Limit Set on a Secured Credit Card?

Each card issuer sets secured credit card credit limits according to their own guidelines. Typically, the issuer will evaluate your income, expenses, and credit history to establish a starting credit limit. With a secured credit card, your credit limit is tied to a security deposit. For example, if you are approved for a secured card with a credit limit of $300, you will be required to provide$300 as a security deposit before you are allowed to use the card.

Note that this deposit is not the same thing as a fee; it is refundable at the close of your account as long as you do not have an outstanding balance or if the issuer upgrades your account to an unsecured card.

How Do You Qualify for a Higher Limit on Your Secured Credit Card?

If the credit limit of a secured credit card isn’t sufficient to meet your financial needs, you may want to increase the limit. How do you increase your secured credit card limit? You will likely need to increase your credit score and build a good credit history by using your credit responsibly and always paying your bills on all your loans on time.

Even though your secured credit card is backed by your security deposit, you don’t want to max out your credit limit each month. Credit utilization accounts for a certain percentage of your credit score depending on the model, and it is best to keep your credit utilization rate as low as you can. Credit utilization is calculated by dividing how much credit card debt you have by your total amount of credit limit among all cards. Therefore, if you have a $500 secured credit card limit, you want to keep your revolving balance as low as you can.

How Long Should You Have a Secured Credit Card Before You Request a Credit Limit Increase?

It can take time to obtain a credit increase on a secured card, depending on your financial situation. The lower your credit score, the longer it may take to increase it to a level where you may be eligible for a credit line increase.

With a Discover it® Secured Credit Card, an automatic monthly account check is done after seven months to evaluate whether your account is eligible to transition to an unsecured credit card.* If you graduate to an unsecured credit card, you can call to see if you qualify for a higher credit line. You may be asked to provide your current income and housing costs.

Knowing that your goal is to move to an unsecured credit card, monitor your credit score to see how it fluctuates each month. If you do not have a Discover it Secured Credit Card, contact your card issuer after six months to inquire can you increase your limit secured credit card or can you be upgraded to an unsecured card instead.

Do You Have to Pay an Additional Deposit to Get an Increased Credit Limit on Your Secured Card?

While the ultimate financial goal is to move away from secured card use, not every cardholder will qualify for an unsecured card, even after months of responsible card use. You may need more time to build your credit history. During this time, you can add more to a secured credit card, as needed.

You first have to demonstrate that you have the ability to repay the credit card loan by providing your income and housing costs. After you are approved for a particular credit line, you can add additional funds to the security deposit up to the approved credit line. An increased credit line on your secured card can help you feel more financially prepared for unplanned expenses, such as car trouble or medical costs. Keep using your card responsibly and your credit score may reach the threshold to qualify for an unsecured credit card.

Builds credit with responsible use: Discover reports your credit history to the three major credit bureaus so it can help build your credit if used responsibly. Late payments, delinquencies or other derogatory activity with your other credit card accounts and loans may impact your ability to build credit.

Getting your deposit back:  Monthly reviews start your seventh month as a customer. We will refund your security deposit if you have made all payments on time for the last six consecutive billing cycles on your discover accounts including any loans, and you've remained in "good status" on all credit accounts you are responsible for whether they are Discover accounts or not. "Good status" means: (1) your credit report shows no delinquencies, charge-offs, repossessions, or bankruptcies for the six months prior to our review, and (2) your Discover secured card is not in a prohibited status at the time of our review, including, but not limited to: closed, revoked, suspended, subject to tax levy, garnishment, deceased, lost/stolen, or fraud. Monthly reviews may be delayed if you change your payment due date. We typically process your refund in 2-3 business days based on your delivery preference. If you close your account and pay in full, we'll return your deposit within two billing cycles plus ten days.

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.