If your application for a credit card is approved, one of the first pieces of information you’ll receive is your credit card limit, which is the maximum amount of money you can charge. You may be asking yourself, “What is a good credit limit?” Unfortunately, the simple answer is: it’s different for each person.

Credit card limits can vary greatly, sometimes by thousands of dollars. So, if you’re granted a $500 credit limit, is that “bad” compared to a $10,000 limit? Or is a lower limit better? Consider these guidelines to help you understand your credit limit:

  1. How Is Your Credit Card Limit Determined?
  2. How Credit Limits Affect Your Credit Score
  3. Credit Limits for Secured Credit Cards
  4. Can You Change Your Credit Limit?

1. How Is Your Credit Card Limit Determined?

There are a variety of factors that can influence your credit limit, including:

  • Current income, debts, and your debt-to-income ratio (DTI). Your DTI compares the total amount you owe to what you earn.
  • Credit history and credit score.
  • History with the creditor you are applying to.
  • Creditor’s goals and the current economic environment.

2. How Credit Limits Affect Your Credit Score

Your credit score is based on a variety of factors and inputs. For example, for your FICO® Credit Score, payment history typically makes up approximately 35 percent of the total calculation while amounts owed typically makes up about 30 percent. Other considerations are length of credit history, about 15 percent; credit mix (having accounts such as mortgages, loans and credit cards), about 10 percent; and new credit (or credit inquiries received from new creditors) about 10 percent. In addition, other factors like credit utilization may be taken into consideration, so a high credit limit while carrying a low balance can be beneficial.

3. Credit Limits for Secured Credit Cards

For a secured credit card, your credit limit is based on the amount of your security deposit (up to what the issuer has approved). For example, if you deposit $1,000 on your secured card, your credit limit is $1,000.

4. Can You Change Your Credit Limit?

If your credit needs have changed since you first got your card, you can make a case for an increased credit limit by reaching out to your credit card’s customer service department or going to the card issuer’s website to make the request online. Among other criteria a cardholder must meet, the issuer may also consider whether the card has been used responsibly overall, such as the cardholder paying bills on time and avoiding maxing out the card.

In the end, there’s no such thing as a “good” or “bad” credit limit — it depends on the individual account holder’s use of their credit card.

Published December 12, 2016.

Updated June 22, 2021.

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