Credit card Q&A: “What credit card limit can I get?”
Consumers are often curious about what they’ll qualify for in the way of a credit card, if approved at all.
Unfortunately, it’s always a bit of a mystery until after you apply and receive your credit card (and its related terms).
But you can certainly clue yourself in a bit before you apply.
Credit card issuers tend to look at two main things, including your credit score and your income.
It used to be household income, but now it’s just your income, since living with your wealthy parents doesn’t necessarily mean they’ll pony up if you can’t pay your debts.
Credit card companies also ask for employment information (and schooling prior to that) to get a better idea of what you make, considering the fact that you simply state a number on the credit card application.
They then take this information and look at it alongside your credit score, along with the information in your credit report, to determine your credit card limit.
Lower Credit Scores and Income = Lower Credit Card Limits
Generally, those with lower credit scores and lower gross annual income will receive lower credit card limits, and vice versa.
So a consumer with an average credit score and low income who applies for a credit card may receive a $3,000 credit card limit, while a consumer with an excellent credit score and higher-than-average income may receive a $25,000 credit card limit.
Of course, it’s hard to just say you’re this, so you’ll get that.
The takeaway is higher income and credit scores equals higher credit card limits.
Additionally, those with limited credit history will see lower limits than those with proven track records of supporting large amounts of debt, so understand that it takes time.
Keep in mind that charge cards don’t have a pre-set spending limit, but must be paid in full each month.
Tip: Having a lot of outstanding credit card debt can lower your credit score, so it’s best to keep balances to a minimum, regardless of your credit card limit.
