Your credit card limit is the maximum amount of money you can charge to your credit card. Once you learn how credit limits are determined, you can take the steps needed to increase your chances of qualifying for a higher credit limit.
What’s a Credit Card Limit?
Last Updated: January 18, 2024
5 min read
Key points about: credit card limits
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Your credit card company determines your credit limit, which is the maximum amount you can spend on your credit card.
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A higher credit limit may help keep your credit utilization ratio low, which can positively impact your credit score.
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Several factors affect your credit limit, including your credit report and your personal income-to-debt ratio.
What is a credit limit?
How is a credit card limit determined?
Credit card limits reflect how much money the credit card company thinks cardmembers can borrow and manage responsibly. Your credit score is an important factor in determining your credit limit, but a high score alone doesn't necessarily guarantee a high limit.
To determine your credit limit, credit card issuers typically look at your credit history, your income, and your overall debt, like how much you pay for your rent or mortgage. These factors and others may influence your card eligibility and potential terms. You can determine if you’re likely to qualify for a Discover credit card with our online pre-qualification tool.
What’s the best way to get a high credit card limit?
Each issuer has its own criteria for determining credit card limits and may weigh individual components of your credit profile uniquely. The best way to get a high credit limit is to make sure all the components that affect your credit score are in good standing.
Factors that help determine your credit card limit
Credit report
Your credit report is very important when it comes to determining your credit limit, and it includes:
Payment history: Your payment history—which can account for a significant percentage in credit scoring models—is a measure of your creditworthiness. The idea is that if a cardmember has paid their bills on time in the past, they’re more likely to do so in the future. Ensuring you always make your credit card payments on time is one of the best long-term paths to a higher credit limit.
Credit utilization: Credit utilization refers to the amount of a person’s credit in use compared to their total credit available. A lower credit utilization—having less credit in use—will generally be better for card approval and credit limit determination.
Credit card issuers may look at both overall credit utilization and utilization on individual lines of credit when determining the size of a credit card limit on a new account. If you plan on applying for a new card in a few months, paying down some existing balances could help raise your credit limit.
Length of credit history: Having a longer credit history gives issuers a larger pool of data to predict how you’re going to use credit moving forward, and a long history of responsible credit use may help improve your odds of a higher credit limit.
Recent inquiries: A person who’s applied for a handful of credit cards—or other lines of credit—in a short period of time may be viewed as a risk by issuers and could therefore receive a lower credit card limit. When you apply for a credit card, the card issuer conducts a “hard inquiry,” and too many of those in a short period of time may impact your credit score.
Personal income and monthly expenses
Your income and housing costs may help determine your credit limit. If an applicant has a high income with a relatively low rent or mortgage, odds are they have more discretionary income and thus may qualify for a higher spending limit, depending on other factors.
Did you know?
Building a positive credit history could help you qualify for a higher credit limit in the future. With a secured credit card from Discover, you can improve your financial habits and build your credit with responsible use.1 The Discover it® Secured Card even gives you an opportunity to earn rewards.
Does a high-limit credit card affect your credit score?
Although a high-limit credit card doesn’t affect your credit score by itself, having a high total limit may make it easier to lower your credit utilization ratio.
For example, if you have two credit cards with a total credit limit of $5,000, and your balance is $2,500, your credit utilization ratio is 50%. But if you add high-limit cards that increase your total available credit to $25,000, and they don’t have a balance, your credit utilization rate for the same balance would be 10%. So, having high-limit cards may let you run a larger balance without your credit utilization ratio affecting your credit score, as long as you keep your credit utilization rate below the recommended amount.
What happens if you go over your credit limit?
Depending on the terms of your cardmember agreement, your credit card issuer may charge you a fee for going over your limit, or the transaction may be declined.
Can you raise the credit limit on your credit card?
If you don’t receive your ideal credit limit right after applying for a card, don’t fret. Many issuers have been known to increase credit limits on their own over time. And if you’ve used a card for a while without any missed payments or other negative activity, you can request a credit limit increase yourself.
Can your credit limit be reduced after it’s determined?
You might think that a high credit limit won’t decrease once you have it. But achieving a high credit limit doesn’t mean you can ignore the factors that determine your credit limit. Card issuers periodically review your credit score. If you’re consistently using a large percentage of your high credit limit, your score may be affected, which, FICO2 explains, may lead to a lower credit limit.
Is it better to ask for a credit limit increase or apply for a new credit card?
Whether applying for a new credit card or requesting a line increase, these actions may impact your credit score, but increasing the limit on an existing card will usually have a lesser effect. However, if your credit score is already high, it might be worth applying for a new card to get rewards that are only offered to new cardmembers. For example, Discover Cards offer Cashback Match to new cardmembers, which means that Discover will automatically match all the cash back you’ve earned at the end of your first year.3
Your individual credit history will determine whether it’s best to request a limit increase on an existing credit card or apply for a new card.
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Build credit with responsible use(Secured): Discover reports your credit history to the three major credit bureaus so it can help build/rebuild your credit if used responsibly. Late payments, delinquencies or other derogatory activity with your credit card accounts and loans may adversely impact your ability to build/rebuild credit.
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FICO® Credit Score Terms: FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries.
Discover Financial Services and Fair Isaac are not credit repair organizations as defined under federal law or state law, including the Credit Repair Organizations Act. Discover Financial Services and Fair Isaac do not provide “credit repair” services or assistance regarding “rebuilding” or “improving” your credit record, credit history or credit rating.
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Cashback Match: We’ll match all the cash back rewards you’ve earned on your credit card from the day your new account is approved through your first 12 consecutive billing periods or 365 days, whichever is longer, and add it to your rewards account within two billing periods. You’ve earned cash back rewards only when they’re processed, which may be after the transaction date. We will not match: rewards that are processed after your match period ends; statement credits; rewards transfers from Discover checking or other deposit accounts; or rewards for accounts that are closed. This promotional offer may not be available in the future and is exclusively for new cardmembers. No purchase minimums.
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