Credit Limit Guide

To get approved for a high limit credit card, you will need good to excellent credit and proof that you can afford a high spending limit. More specifically, your credit limit will be determined by several factors, including your income, assets, and existing debt obligations. Picking the right credit card goes a long way, too.

How to Get Approved for a High Limit Credit Card

• 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. 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 cardholders' reviews.
• Improve your credit score: High limit credit cards typically require good or excellent credit. Before you apply for such a card, you should check your credit score to gauge your approval odds. If you're unlikely to qualify based on your score, you will need to add positive information to your credit report. 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. Also, if your income goes up in the future, be sure to update your credit card's information, as this could help get you a higher credit limit.
• Get a credit limit increase: Some credit card issuers may automatically review your account for a credit limit increase every 6 to 12 months, but it's not guaranteed. You can also request a credit limit increase, either online or by calling the issuer's customer service department. Keep in mind that requesting a credit limit increase on your own may result in a hard inquiry, which could hurt your credit score. 

Ultimately, to have a better chance at getting approved for a high limit credit card, you should also make sure to always pay bills on time, use 30% or less of your available credit, and otherwise make good financial decisions.

Your credit card limit could have been decreased for several reasons, such as missing payments (including on a different card or loan) or changes in income. This could lead the issuer to assess that the risk of you missing payments in the future has increased.

Here are some possible reasons why your credit card limit decreased:

• Missed payments: If the lender detects a number of missed or late payments, they could assume that you might be experiencing financial difficulties.
• Reduced income: If your income was lost or you received a pay cut, your credit limit could be decreased to fall in line with your current income levels.
• Credit utilization: The percentage of your available credit that you use each month is called credit utilization. It is indicative of your ability to handle additional spending power. So, exhausting your allotment of credit could also lead to a credit limit decrease.
   
  The same could happen for not using your credit card much or at all over a certain amount of time.
• Issuer is reducing credit risk: Credit card issuers reduce credit limits collectively when the economy is uncertain, in an attempt to reduce credit risk.

Ultimately, it is worth noting that credit card limit decreases can often happen without notification. Therefore, it is always a good idea to check out for credit limit changes, so you don't accidentally go over your credit line.

You can request a credit line increase every 4-6 months, or even more frequently. But your chances of being approved for an increase are best if you wait at least 6 months from when you opened your account or last requested a higher limit. If you request an increased limit right after being approved for a new card, it's unlikely that anything will have changed since the issuer made its initial decision about your credit limit. If you wait 6 months and manage your account responsibly in the meantime, however, you'll have proven that you can handle your current credit limit.

Here's what you need to know about requesting a credit limit increase:

When you request a credit line increase, the issuer will ask about your current gross income, employment status, key financial obligations, etc. Once you've made a request, you should generally wait 6-12 months before submitting another. You can ask for another credit limit increase earlier if your financial situation changes, though. For instance, receiving a raise from your job is a great time to ask for an increase since you'll have more money to spend. Anytime your overall income goes up, you could be eligible for a limit increase.

Requesting a credit line increase is easy, and you'll often receive a decision quickly—either instantly or within 10 business days. Just make sure to request an increase when you have the greatest chance of being approved. Asking for a credit limit increase usually leads to a hard credit inquiry, which can cause a temporary dip in your credit score. While your score will recover, it's best to avoid numerous hard inquiries in a short period of time, especially if you need your credit to be in good shape for a particular reason in the near future.

One of the easiest high limit credit card to get is Chase Sapphire Preferred because its starting credit limit is $5,000 and you need at least good credit for approval. Chase Sapphire Preferred does have an annual fee of $95. 

A credit card's accessibility will vary based on applicants' creditworthiness, so if you're looking for a card with lower costs and a lower entry bar, secured credit cards such as the OpenSky® Secured Visa® Credit Card and U.S. Bank Secured Visa® Card offer credit limits starting from $200 and $300, respectively.

Here are the easiest high limit credit cards you can get: 

• For good credit and better – Chase Sapphire Preferred: $5,000 minimum credit limit. $95 annual fee.
• For fair credit and limited – Petal® 2 Visa® Credit Card: $300 - $10,000 credit limits, depending on creditworthiness. $0 annual fee.
• For bad credit – Credit One Visa: $300 minimum credit limit. $75 intro 1st yr, $99 after annual fee.
• High limit secured – U.S. Bank Secured Visa® Card: Your refundable security deposit will set your credit limit between $300 and $5,000. Available to applicants with bad credit or better. 

Your credit limit will be primarily set by your creditworthiness. So if you think your options are limited by your credit history, best to aim for a secured credit card as the deposit you put down will generally act as your credit limit. The highest unsecured credit limit you'll get with bad credit is likely to be around $300. It's just a question of how much will get used up by initial fees. The U.S. Bank Secured Visa® Card features a $0 for instance.

That said, only some credit cards list their minimum credit limits in the terms and conditions. And your actual credit limit could be higher than what's listed, depending on your personal creditworthiness. But no matter what your credit standing is, getting a high limit credit card will get easier as your credit score improves.

The reason why your credit limit went up is probably because you received an automatic credit limit increase from your credit card company. Creditors periodically review cardholders' accounts and may consider increasing the credit limit as a reward for consistently paying the monthly bills on time and maintaining a low debt level. 

Another reason your issuer might increase your limit is if you updated your account profile with a higher income. The first account review for a potential automatic credit limit increase typically happens after your account has been open for about six months.

What you should know about automatic credit limit increases:

• An automatic increase uses a soft pull of your credit, which does not hurt your credit score. A soft pull can occur at any time and without your knowledge. 
• Some issuers may give you the option to deny an automatic credit limit increase or request an even higher limit.
• If you initiate a request for a credit limit increase, a hard pull may occur, depending on the issuer. Hard pulls can only be done with your permission, and may cause a slight dip in your credit score. 

An automatic credit limit increase could actually improve your credit score. A higher credit limit will lower your credit utilization. But that's only if your spending doesn't increase in proportion to the raised limit. The general rule is to maintain an overall utilization ratio of less than 30 percent. Lower utilization is better for your credit score.

The difference between a credit card's available credit and its credit limit is the relationship between the cardholder's current spending power and his or her total spending power. A credit limit is the maximum amount that can be charged to a credit card overall. Available credit is the credit limit minus any unpaid balance, including pending charges that have yet to post to the account. 

Your available credit will increase by the amount of each payment you make. A credit card's credit limit and available credit match when the balance is $0 or the card is “maxed out.”

What you should know about credit card limits:

• While you can spend up to your entire credit limit, bringing your available credit to zero it's not a good idea. A maxed-out credit card will raise your credit utilization, which will damage your credit score. 
• The general rule is to have the balance listed on each of your credit card statements amount to less than 30 percent of the card's credit limit. That would leave you with more than 70 percent available credit on each account.
• A maxed out credit card, on the other hand, could leave you with no emergency funds. If you have a big chunk of available credit, you can charge whatever's needed to deal with an unexpected circumstance such as a hospital bill or a car repair.

Here's what happens when you try to spend more than your available credit:

If you try to make purchases on a card with no available credit, there may be consequences. In most cases, the transaction will simply be denied. Other cards may process it but then hit you with an over-limit fee (if you've opted-in for the ability to spend above your limit). The issuer may even reduce your limit, too. 

A high penalty interest rate might also apply, perhaps canceling any low introductory APR previously in effect. Over-limit policies vary by issuer, so be sure to review your card's terms and conditions or contact customer service for specifics.

You should increase your credit limit as long as it won't make you overspend. Getting a credit limit increase does more than just give you increased spending power. It also gives you the potential to lower your credit utilization, which can benefit your credit score. But just because receiving a credit limit increase is a good thing does not mean it's always the right time to ask for one.

You shouldn't ask for a higher credit limit unless your account has been open for at least 6 months and you've been paying the monthly bills on time. Otherwise, you're likely to be rejected, as would also be the case if your credit score has gone down a lot since you got the card. Also, it's best not to request an increase right before you apply for a credit card, auto loan, mortgage, etc. You'll want your credit to be in top shape, and requesting a credit limit increase will usually result in a hard pull of your credit report, causing a temporary dip in your credit score.

Assuming the timing works out for your situation, you can look forward to a handful of notable benefits following a credit limit increase.

Why you should increase your credit limit:

1. It gives you higher spending power.
2. It can decrease your credit utilization ratio and help your score.
3. It leaves you better prepared to face a financial emergency.
4. It reduces the chance that you'll max out your credit card.

If you curious about how a higher credit limit can lead to lower credit utilization and corresponding credit score gains, an example might be helpful. Let's say you have a $500 credit limit. If you spend $200 in a month, you have 40% credit utilization. If your credit limit goes up to $800 and you still spend just $200, you'd have 20% credit utilization. Anything under 30% is good for your credit score.

So, getting an increase can help you reduce your utilization percentage without having to cut back on your expenses. Plus, if you already have low utilization, a credit limit increase could allow you to spend more without hurting your score.

Requesting a credit limit increase will likely trigger a hard inquiry and cause a short-term decrease in your credit score. Receiving an automatic credit limit increase (i.e. your issuer increases your credit limit without you asking) will not hurt your score. No matter how you receive a credit limit increase, it will provide long-term credit-score benefits to responsible users.

A credit limit increase will give you access to more available credit to use. As a result, you will get a better credit utilization ratio, assuming your spending does not increase, too. The lower the ratio, the better your credit score. If you continue to spend and maintain a high balance on your account, you will see a negative impact on your credit score. A credit limit won't help your credit score if you just max it out immediately.

The usual credit limit for a first credit card could be anywhere between $100 and $500, depending on which card you get. It could be as low as $100 for store credit cards, or up to $500 if your first credit card is issued by a bank or credit card company. Getting approved for a first credit card 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 the key factors that go into extending an applicant's credit limit.  

Here's what you should know about your first credit card limit:

• Average credit card limits: The average credit card limit for new accounts is $5,021, according to TransUnion data from 2022. But there is no exact data on the average/usual credit card limit for people that have limited credit history. 
• Get a higher initial credit limit: It is possible to get a higher initial credit limit by applying for a secured credit card. In this case, the security deposit will serve as your credit limit. And for some cards you can put as much as $1,000, or even higher. You can also get a higher credit limit if you're listed as an authorized user on a card with a stellar credit history.
• Get a credit limit increase: Many credit card issuers review accounts regularly and raise credit limits automatically if the account is in good standing. So, in order to get a credit limit increase, make sure you use your credit card responsibly. That means paying your bill on time every month and keeping your credit utilization below 30%. You may also request a credit limit directly with the issuer, usually after at least 6 months of opening the account. 

The initial credit limit that you will get depends on several factors, such as your credit score and income. So, if you have a limited credit history, it's hard to get a high credit line. But once you start building your credit, you will have a better chance at getting a higher credit limit. 

If you already have a mortgage or loan in your name, you may be extended a more generous credit limit.  But this will only happen if you've managed the previous accounts responsibly. If you'd like to know where you stand, you can check your credit score for free, right here on WalletHub. 

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.

What you should know about credit card credit limits:

• Credit card limits can be as low as $200. 
• Some high credit limit credit cards can offer limits starting with $5,000 and upwards of $10,000.
• High credit limit credit cards 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. Feel free to also check out WalletHub's guide on how credit limit is determined, to get a better sense of what you can expect.