Your credit limit should be at least 3 times higher than your usual monthly spending. That's because your overall credit utilization ratio should stay below 30%. If your spending exceeds that, you risk damaging your credit score. That's why it's important to know what credit cards usually offer as a credit limit before applying for one.
Credit card limits can be as low as $200. However, some high credit limit credit cards can offer limits starting with $5,000 and upwards of $10,000. These will generally be available only to applicants with good or excellent credit, and a high enough income to afford payments. On the other side of the spectrum, high limit secured credit cards are open to applicants with bad credit, as they allow higher-than-average security deposits that establish credit limits and serve as collateral.
How to manage your credit limits and spending
Whenever your spending habits change and your credit utilization ratio grows, you should request a credit limit increase, or apply for a new credit card. Your credit utilization accounts for roughly 30% of your credit score, so both are viable options if your credit card spending goes up. In addition to a higher credit limit, a new credit card can also come with advantages like extra rewards and better rates. It also enables you to adopt the Island Approach and compartmentalize the use of your cards to maximize rewards and minimize finance charges.
The average first credit card limit is around $1,800, according to Experian. That’s based on a credit score of 300 to 499, which is the starting point for someone with little or no credit. When you start out with credit, it’s perfectly normal for your first credit card to have a small credit limit.… read full answer
Getting approved for a first credit can be difficult if you have little or no credit history. If you qualify for a card, you may end up being disappointed with your starting credit limit. That’s because your credit history is one of, if not the key factor that goes into extending an applicant’s credit limit.
As a new cardholder, you probably don’t have a history of using credit responsibly. Therefore, your issuer doesn’t have much to go on, so they’ll usually start you off with a small credit limit. If you’re applying for your first card with a mortgage or car payment under your belt, you may be extended a more generous credit limit, provided you’ve managed those accounts responsibly.
The amount of your first credit card limit will depend on the type of card you receive. Credit card companies don’t disclose starting credit limits, but for a store retail card such as the Amazon store card, cardholders report a starting credit limit of around $600. If it’s a major Visa or Mastercard, you may be approved for a slightly higher credit limit. Capital One Quicksilver cardholders report an average starting credit limit of up to $1,000.
To land a first credit limit above the $1,200 average, you’ll need that established credit history with no late or missed payments. You might land a higher credit limit if you’re listed as an authorized user on a card with a stellar credit history.
To get the credit limit you truly want, consider applying for a secured credit card. You’ll be essentially setting your own credit limit when you make a security deposit for the amount of your desired credit limit.
If you manage the card responsibly, you may be eligible for a secured credit card with a higher credit limit. In addition, your security deposit is refunded in full, if you close the account in good standing.
A high credit limit is a limit of $5,000 or more. For high credit limits, you’ll need good-to-excellent credit, high income and little existing debt, if any. If you have good credit, you should have high odds of getting approved for a credit limit around $5,000. With excellent credit, you may get a limit of more than $10,000. A high credit limit is good because using up most or all of your credit card’s limit is bad for your credit standing.… read full answer
One of the highest-limit credit cards is the Chase Sapphire Reserve® card. If approved for the card, you’ll receive a credit limit of at least $10,000, and some cardholders with excellent credit and high incomes have reported receiving limits that were several times the minimum. High-limit credit cards also often come with some of the best rewards and bonuses, as is the case with Chase Sapphire Reserve.
To get a high limit credit card, you will need good or excellent credit and proof that you can afford a high spending limit, as your income, assets and existing debt obligations will be taken into consideration. Picking the right credit card goes a long way, too.
Apply for a credit card with a high starting limit
Top-notch credit cards such as the Chase Sapphire Preferred® Card typically offer credit limits starting at $5,000 to $10,000. You may find minimum starting credit limits listed in some cards’ terms and conditions. In other cases, you might be able to get some information from cardholder reviews.
If you’re unlikely to qualify based on your score, you will need to add positive information to your credit report by catching up on any past-due bills and maintaining a steady history of on-time payments, among other things. Once you’ve established a strong credit profile, you can then target credit cards known for their high initial credit limits.
Increase your income and reduce your debt
The higher your income is, the better chance you have of getting a new card with a high initial credit limit. Similarly, reducing your debt boosts your odds.
You might therefore want to consider increasing your income through a second job, investments, or even a new job with a higher starting salary. Also, if your income goes up in the future, be sure to update your credit card’s issuer, as this could help get you a higher credit limit.
Not all issuers will give automatic increases, and there’s no guarantee the issuers that do provide them will automatically bump up your credit limit. However, requesting a credit limit increase on your own may result in a hard inquiry, which could hurt your credit score.
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