How Is Credit Limit Determined?

There Are a Variety of Factors Used to Set a Spending Limit

Image shows how credit limits are determined, including Type of credit card, Income, Debt-to-income ratio, Credit history, Limits on other credit cards, If applicable: Co-applicant income and info

The Balance / Theresa Chiechi

The credit limit on your credit card is the maximum balance you're allowed to have on your card at a given time. The size of your credit limit affects the purchasing power you have with your credit card—the larger your credit limit, the more you can purchase. Once you reach your credit limit, your creditor won't let you make any additional purchases until you pay off some of your outstanding balance.

Credit card issuers use a variety of factors to set the credit limit for credit cards, and until they've considered these factors, they can't offer a firm credit limit to you.

Factors That Affect Your Credit Limit

The Type of Credit Card

Think of credit cards as a product with predefined features. Like the interest rate and fees, credit limits are another predefined feature. How credit limit is set depends on the credit card.

Some credit cards have a specific credit limit, $1,000 for example, that every approved cardholder receives, regardless of other factors. Other credit cards have a credit limit rate and approved cardholders are assigned a credit limit within that range. For example, possible credit limits for a particular card may fall between $5,000 and $10,000. The most well-qualified applications will be approved for a credit limit on the higher end of the range.


It would be nice if they did, but credit card issuers don't publish the credit limits for credit cards. If you poke around popular credit card review websites, you may find user-submitted information about credit limits for various credit cards.

Your Income

The amount of money you make generally affects the amount you can afford to pay. While you have a better chance of getting approved for a higher credit limit if you have a high income, there's no guarantee that your income will get you a high credit limit. Other factors, like the type of credit card, still come into play.

Your Debt-to-Income Ratio

Using the information from your credit report and credit card application, the credit card issuer will be able to estimate your debt-to-income ratio. This ratio may affect the credit limit you receive on your credit card. It means that a high income offset by high debt payments could result in a lower credit limit than if you were spending less money on monthly debt payments.

Your Credit History

How you've handled credit limits on your other credit cards will not only affect whether you get approved for a new credit card but also the credit limit you'll be approved for. Late payments, high balances, and other negative information make it less likely that you'll be approved for a high credit limit.

Limits on Other Credit Cards

Credit card issuers may take their cues from the other credit cards you have. If your credit report shows that you have high credit limits on your other credit cards, you have a better chance of being approved for a high credit limit on a new credit card. On the other hand, if you've typically had $500 and $1,000 credit limits, it's unlikely that you'll be approved for a $10,000 credit limit right away.

Co-Applicant Income and Credit Information

If you're applying jointly with another person, the credit card issuer will consider both of your incomes and credit qualifications to set your credit limit.

Bank balances and other assets generally do not affect your credit limit, unless you're offering money as collateral to secure the credit line as with a secured credit card.

Knowing the factors that credit card issuers use to set credit limits, you're more likely to receive a low credit limit if your income is low, you have a high debt-to-income ratio, you're just starting out with credit or are rebuilding your credit history, or the limits on your other credit cards are low.

Unique Situations

Secured Credit Cards

While most traditional credit cards decide your credit limit, you control your credit limit on a secured credit card. That's because the credit limit on a secured credit card is typically equal to the amount of the security deposit you make. Depending on the credit card, you may be able to deposit up to $10,000 for a credit limit.


The money you've used for a security deposit is unavailable for spending until you close the account or your credit card issuer converts your card to an unsecured credit card. Make sure you only put aside what you can afford.

Charge Cards and No Present Spending Limit Cards

There are two types of credit cards that don't have a hard credit limit: charge cards and credit cards with no preset spending limit.

In both cases, you do not have a firm credit limit that you can spend. Instead, the credit card issuer imposes a soft limit that can change depending on your income, credit history, and purchasing habits. The difference between these two types of cards is that you're expected to pay the full balance on a charge card each month, while you may be allowed to revolve your balance on a no preset spending limit credit card.

When Do You Find Out Your Limit?

Even the timing of finding out your credit limit is totally dependent on the credit card issuer. You may find out your credit limit at the same time you're approved, or you may not learn until you receive your new card in the mail. That means you can't make any concrete plans for using your credit card for purchases or balance transfers until you know for certain what your credit limit will be.

Getting a Higher Spending Amount

You're not necessarily stuck with the credit limit you start out with. After several months of using your credit card responsibly, your credit card issuer may automatically raise your credit limit.


For the best chance at getting an automatic credit limit increase, use your credit card, don't max it out, and pay all or at least most of your bill each month.

Not all credit card issuers automatically increase credit limits. You may have to request a credit limit increase for a bigger credit limit. It's pretty simple and quick to request a credit limit increase—just log into your online account or call your credit card's customer service number. You may have to update your income or provide a specific credit limit amount you'd like to receive. The credit card issuer will process your request and let you know whether your credit limit increase request has been approved.

If your credit limit increase isn't approved, your credit card issuer will most likely send an email or letter letting you know the reasons you weren't approved. If your credit score played a factor in the decision, you may receive a free copy of the score that was used and any factors that influenced your score. If your credit report was used, you'll receive information about ordering a free copy of the credit report that was used in the decision.

Credit card issuers determine your credit limit after you're approved. Your credit limit will be based on the type of credit card, your income and credit history, and credit limits on other credit cards. The exception is a secured credit card where your credit limit is based on the amount of your security deposit.

Frequently Asked Questions (FAQs)

Which credit cards offer the highest credit limits?

Some of the highest credit limits come with Visa Infinite cards, such as the Chase Sapphire Reserve card, and Mastercard World Elite cards, such as the Citi Premier card.

Is it better to ask for a credit limit increase or open a new account?

Opening a new account can come with negative impacts on your credit score, such as reducing the average age of your credit and creating a hard credit inquiry. A credit limit increase doesn't have a downside in terms of your credit score, so it may be the better option. However, if you only have one credit card, then you may want to open up a new account to increase your number of credit accounts.

Was this page helpful?
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Experian. "What Is a Credit Limit?"

  2. Experian. "Debt-to-Income Ratio,"

  3. Experian. "What Affects Your Credit Scores?"

  4. Experian. "What Is a Credit Card Cosigner and Should You Use One?"

  5. Citi. "6 Things You Need to Know About Secured Credit Cards,"

  6. myFICO. "Can I Build a Good FICO Score If a Charge Card Is My Only Credit Account?"

  7. Capital One. "Credit Line Increase FAQ,"

Related Articles