diff --git a/fs/ext4/crypto.c b/fs/ext4/crypto.c
index cf0a0970c095..f41f320f4437 100644
--- a/fs/ext4/crypto.c
+++ b/fs/ext4/crypto.c
@@ -163,10 +163,17 @@ static int ext4_set_context(struct inode *inode, const void *ctx, size_t len,
 	 */
 
 	if (handle) {
+		/*
+		 * Since the inode is new it is ok to pass the
+		 * XATTR_CREATE flag. This is necessary to match the
+		 * remaining journal credits check in the set_handle
+		 * function with the credits allocated for the new
+		 * inode.
+		 */
 		res = ext4_xattr_set_handle(handle, inode,
 					    EXT4_XATTR_INDEX_ENCRYPTION,
 					    EXT4_XATTR_NAME_ENCRYPTION_CONTEXT,
-					    ctx, len, 0);
+					    ctx, len, XATTR_CREATE);
 		if (!res) {
 			ext4_set_inode_flag(inode, EXT4_INODE_ENCRYPT);
 			ext4_clear_inode_state(inode,