What is a credit limit?
Knowing your credit limit can save you from expensive mistakes when it comes to credit card spending
What is a credit limit?
A credit limit is the maximum balance you can borrow on a credit card at any given time.
Credit limits are unique to individuals and their credit card accounts and are usually set by your lender.
Your credit limit should be stated on correspondence you receive from your credit card provider, who will notify you should it change.
How is my credit limit calculated?
When you apply for a credit card, the lender will look at several factors to determine a reasonable credit limit for you. These include:
How much you earn - in particular, your disposable income after bills and other outgoings
How much you already owe – any debts, such as your mortgage, loans and other credit cards will be taken into account
Your current credit limits - to assess the different lines of available credit you already have before allowing you to take on more debt
Your repayment history – lenders will want to know how responsible you’ve been with paying debts in the past
How long you’ve been a customer - if you’ve been with a provider for a while, it might allow a higher credit limit
Some of this information lenders can see from your credit report, so having a healthy credit score is important. You can follow our tips to improve your credit rating and get yourself in as strong a position as possible before you apply for a new credit card.

What happens if I exceed my credit limit?
It’s best to avoid going over your credit limit. But if you do exceed it you could…
Be declined a purchase and stopped from spending more on your credit card until you have paid down the balance
Incur a fee for breaking your agreed credit limit
Find your credit rating is negatively affected
If you continually overspend your lender could lower your credit limit, meaning you’ll be able to borrow less in future. They could also ask you to pay back the full amount or close the account.
How do I find out what my credit limit is?
You’ll be told your credit limit when you open your credit card account and receive your card. You can also check by looking at your most recent statement. If you manage your credit card digitally – on your mobile phone or online - you’ll also be able to see the limit when you log in.
What’s the difference between a credit limit and a credit line?
This is essentially the same thing. A credit line is an agreement between you and the lender that they will lend you money up to a certain amount – the credit limit.
How do I avoid going over my credit limit?
Knowing your credit limit and keeping tabs on your spending habits will help you stay within your limit. If you’re concerned about breaching the limit you could set up a direct debit to clear your credit card debt every month.
Other ways to avoid going overspending include signing up for text and email alerts that will notify you if you’re approaching your credit limit. Your lender should provide information on how to do this.
What is seen as a good credit limit?
A good credit limit will depend on your individual circumstances and needs. For most credit card holders this typically means a credit limit where they will only need to access around 25% to 50% of that limit at any given time.
Having a lower credit utilisation – the percentage of available credit (or the percentage of your credit limit) which you use – can have a positive impact on your credit rating. Conversely, spending up to your credit limit every month suggests your finances are stretched and this could harm your credit score over time.
A lower credit limit could suit you if it helps with your monthly budgeting and reduces the temptation to overspend.
In contrast, a large credit limit may be handy in certain circumstances. For example, if you needed to buy an expensive purchase quickly, such as a car for work, a large credit limit on a 0% interest purchase card could give you several months interest-free to pay off the amount borrowed.
What are the pros and cons of a high credit limit?
There are a number of advantages and disadvantages to having a high credit limit. These include:
Advantages:
Allows you more flexibility with your finances, including money for emergencies
Enables you to make bigger one-off purchases and then pay them off over several months, ideally with a 0% deal
Your credit utilisation can be kept lower provided you only spend a small percentage of your credit limit
Because you can spend more you can accrue more points, cashback or air miles on specialist rewards credit cards
Disadvantages:
There could be greater temptation to spend beyond your means and get into debt
You run the risk of being hit with higher interest payments if you only pay the minimum payment on your card and don’t pay off the balance in full every month
It increases the credit available to you which may put other lenders off agreeing to lend to you in future
How can I increase my credit limit?
Contact your credit card issuer and ask for them to raise your credit limit. Most credit cards will have a number on the back you can call. You then wait for them to make their decision and notify you.
Another way to increase the amount you’re able to borrow is to take out a new credit card. It means you will be managing more than one card - and line of credit, but you may find a new card provides more favourable rates.
If you’re turned down for a higher credit limit, it could be because of your credit rating. You can improve your credit score by making sure you’re registered on the electoral roll, checking your report to see if there are any errors that need fixing and continuing to pay your bills on time. Our guide provides more tips to improve your credit score.
Other useful guides
What is a credit card minimum payment?
Getting your first credit card
Compare credit cards with MoneySuperMarket
Finding the right credit card is straightforward with MoneySuperMarket. Just tell us a little about yourself, your financial circumstances and what you need from a credit card. And we’ll look across the market to find credit card offers which we think will suit you best.
You'll be shown a range of credit cards, which you'll be able to sort according to APR, card features, such as rewards or cashback, and your chances of being approved.
Different providers handle initial credit limits in different ways. Some will ask you to choose an initial credit limit up to a certain amount – although this will still have to be approved. Others will simply tell you your credit limit when the application has been approved.
MoneySuperMarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this broking service. Instead we are usually paid a fee by the lenders – though the size of that payment doesn’t affect how we show products to customers.