A credit limit is the maximum amount you can borrow on a credit card at any one time. Your lender will set the initial credit limit by looking at various factors. You may be able to change your credit limit overtime, or your lender may change it.
A lender will look at your credit history, as well as other key factors, to decide whether to accept your application and what credit limit to offer.
Some of the key factors a lender will consider are:
your earnings – in particular, what's left over after your normal monthly expenses
your debts – such as a mortgage, personal loans or other credit cards
your current credit – the limit on any credit cards, store cards or overdrafts you already have available
your repayment history – whether you've missed payments on debts in the past
The lender's goal is to offer you a credit limit they're confident you can afford.
Your credit limit will be included in the information sent to you when you receive your credit card. It will also be shown on your credit card statement. If you have an online credit card account, you may be able to view your credit limit online, once you’ve logged in.
It’s important to know your credit limit before you start spending on your credit card. It can also be useful to keep track of what you’re spending to make sure you don’t, accidentally, go over your credit limit.
If you make a purchase that pushes your debt beyond your credit card limit, the lender may decline the purchase. However, on some occasions they may let it go through.
If you do go over your limit, it can have consequences – you’ll normally be charged a fee and it could also damage your credit rating.
If it happens repeatedly, your lender may lower your credit limit, or ask you to pay back the full amount you owe and close your account altogether.
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Usually you can request to increase your credit limit by contacting your lender.
You'll need to tell them the new credit limit you'd like. Your lender will then look at your card use and credit history to make a decision to either:
approve the credit limit increase
offer you an increase but at a lower credit limit than you had applied for
decline your request
You can also request to decrease your credit card limit. Reducing your unused credit can make it easier to get a loan or mortgage, as you'll be reducing the amount of credit you have available. It may also help reduce any temptation to spend.
It’s important to think about what is affordable for you. Staying within your credit limit helps maintain your credit score by showing you can manage debt sensibly.
When you apply for a credit card, you may be able to set your preferences with your lender. For example, when we tell you there’s a credit limit increase available to you in the future, it can:
be applied unless you contact us to opt out during the notice period
only be applied if you confirm to us you want to opt in
With HSBC, you can change your preferences around this at any time and we’ll keep you updated, depending on your preferences, so you can opt in to the increase, or opt out.
Some lenders may let you request a higher or lower limit through online banking or a mobile banking app. Others may need you to phone or visit your local branch.
Your lender will have a policy on credit limit increases. Some only offer an increase once you've had the card for 6 months or a year. If you’re thinking of requesting a higher credit limit, make sure you can afford the repayments on anything you spend.
A higher credit limit can mean there’s a greater risk you’re borrowing too much, which could cost more, or take you longer, to pay back.
If you do want to request a higher credit card limit, there are some things you can do to help improve your chances of having your request to do so approved:
never miss a payment – even paying your credit card bill one day late could impact your chances of getting a credit limit increase in future
give it time – the longer you've had your card, the more likely you are to get a credit limit increase
use your card regularly and sensibly, without going too close to your credit limit
don't ask too often – requesting a credit limit increase too many times can affect your credit score
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