60-second summary
If you just want an overview of credit limits and how they work, we’ve got you covered:
A credit limit is the maximum amount you can spend (borrow) on a credit card. It's determined by things including your income, spending habits, existing debts, and credit history.
Going over your agreed credit limit can lead to fees, losing your promotional interest rate (if you have one), and harm to your credit score.
A typical credit card limit is often around £3,000 to £4,000, but it can be higher than £10,000 for those with a high income and good credit score.
Credit limits aren’t set in stone: your lender can choose to decrease or, with your permission, increase your limit depending on how you use your card over time.
You can keep track of how close you are to your credit limit using tools such as online banking and apps. Always make at least the minimum monthly repayment and read your statements to make sure transactions, fees, and interest are accurate.
Got enough info and want to see if could be eligible for a credit card without affecting your credit score? Head to our eligibility checker.
What is a credit limit?
A credit limit is the maximum amount that you can spend on your credit card. It’s decided by your credit card provider. You’ll find out what your credit card limit is either when you’re offered a card, via your online banking or app (once registered), or when you get your new card.
If you’re keen to know what limit you’ll be given, you can ask the provider before you sign up. They should be able to give you an idea of how much your credit limit will be. But this could mean they’ll do a credit check to make sure you can afford the repayments.
How is credit limit determined?
When you apply for a credit card, your provider will look at several factors to determine how high your initial credit limit will be. They do this by conducting a hard search that will appear on your credit file.
Your credit limit is unique to you and takes into account your financial history and personal circumstances. The credit card provider will look at:
How much you earn – especially how much income you have left after bills and other outgoings
Existing debts – whether you have a mortgage, other loans and credit cards
Current credit limits – how much credit is already available to you
Other credit you’ve applied for – every application for credit will be marked as a hard search on your credit file
Your repayment history – how well you’ve managed debt repayments in the past
How long you’ve been a customer – the provider might give you a higher limit if you’ve been banking with it for a while.
Lenders might sometimes decrease your credit limit if they have concerns around how you’re using your card – for example if you’re missing repayments – or your credit score goes down.
They might also offer a credit limit increase, which you can find out more about in our guide to increasing your credit limit.
Quick tip
Spending time improving your credit score before you apply means you’ll have a better chance of being eligible for credit cards with cheaper rates and higher limits.
You can find lots of handy tips on how to do this in our guide to building your credit score.
What is a guaranteed credit limit?
A guaranteed credit limit is where you already know what credit limit a lender will give you before you apply.
Here’s how it usually works:
Use an eligibility checker – this could be with a comparison site such as Compare the Market or directly with a lender. These tools use a soft search and sometimes open banking to see what ‘pre-approved’ offers lenders are likely to make to you.
See your guaranteed limit – if you’re eligible, some cards will show you a guaranteed credit limit and interest rate.
Apply for the card – at this point the lender will run a hard credit check and it’s only then that you’ll know for certain whether you’re being offered the card. But if it was advertised with a guaranteed credit limit, this shouldn’t change.
Bear in mind...
Always read the small print before applying and be as accurate and truthful as possible when completing your application.
Pros
Having a guaranteed credit limit can be useful because:
It takes the guesswork out of whether the card will offer enough to cover what you need.
There’s less risk to your credit score as you'll know how much you’re likely to be offered without having to apply, meaning less chance of a wasted application (which will be recorded on your file).
Cons
There are some negatives to guaranteed credit limits:
You’re not guaranteed a high credit limit, so you may be disappointed if you’re offered a lower limit than you wanted.
They can occasionally provide false hope, as you'll still need to make a full application and pass all the lender’s checks. You could potentially be declined for a card that an eligibility checker has indicated you'll be accepted for when the lender does a deeper dive into your credit history.
Not all credit card providers offer guaranteed limits, meaning your choice of cards might be limited.
Quick tip
The higher your credit score, the more likely it is you’ll be offered a higher credit limit and better rates. You can check your score for free using any UK credit reference agency.
What types of credit cards offer guaranteed limits?
Credit builder cards are designed for those with a poor or limited credit history and often advertise guaranteed limits. But keep in mind that, although eligibility is less strict on these cards, they tend to have higher interest rates and offer lower credit limits at the start.
Learn more about guaranteed acceptance credit cards.
What happens if you spend over your credit limit?
Spending over your credit limit is a bad idea as it can cause:
Fees – many credit card companies charge an over-limit fee if you exceed your limit, usually around £12
Loss of promotional rate – you may lose any 0% or promotional interest rate and be moved onto the lender’s higher standard rate
Credit score decrease – regularly going over your limit can negatively affect your credit score, as it suggests you’re not good at managing your money
Declined transactions – your card may be declined at the point of sale, which can be embarrassing
Frozen card – your lender may stop you using the card until you’ve cleared some of your outstanding balance
Account closure – if you continue to go over your limit, you may be asked to settle your full balance. Your lender could also decide to close your account.
What is a ‘good’ credit limit?
A ‘good’ credit limit is subjective and depends on your financial situation. A typical credit card limit is around £3,000 to £4,000, but they can be upwards of £10,000.
If you don’t have any credit history and then successfully apply for your first credit card, chances are you’ll be offered a lower limit. This is because lenders don't have any evidence of how you’ve managed borrowing and so may see you as high risk.
If you’re a high earner with a strong history of repaying debt on time, you may be eligible for a high-limit credit card.
But of course, as we mentioned above, there’s more to eligibility than just those two things. For example, lenders will also look at how much existing available debt you have and how long you’ve been a loyal customer, to name but a couple.
You can use our eligibility checker to see whether you’re likely to be offered a credit card, and if so which ones. Our tool only runs a soft search on your credit file, so you can compare without harming your score.
Compare the Market Limited acts as a credit broker, not a lender. To apply you must be a UK resident and aged 18 or over. Credit is subject to status and eligibility.
Check eligibilityTips on how to manage your credit limit effectively
Managing your credit limit wisely is crucial for maintaining and hopefully improving your credit score. Here are some tips to help you:
Stick to your limit – know your limit and stay under it to make sure your score isn’t negatively affected, and transactions aren’t declined. Ideally, you don’t want to spend more than around 30% of your total available credit limit
Track your spending – register for online banking and use your lender’s app to check your balance and avoid nearing your limit
Keep up with your monthly payments – always make at least the minimum monthly repayment (it can be worth setting up a direct debit to make sure you never miss it). Check your statements to make sure everything looks right, from transactions to any interest and fees charged
Ask for your limit to be changed – if your limit is no longer working for you, speak to your credit card provider about your options for a credit limit increase or decrease.
There’s even more info in our helpful guide on how to manage your credit card.
Does your credit limit affect your credit score?
Yes, your credit limit can impact your credit score. A higher limit can improve your credit utilisation ratio, which is the percentage of your credit limit that you're using. Keeping this ratio to under 30% of your total limit is usually beneficial for your credit score.
FAQs
Can my credit limit decrease?
Yes, credit card issuers can decrease your credit limit if they see you as a higher risk. This is often due to missed payments or changes in your credit score.
How often can I request an increase?
How often you can ask for a limit increase varies depending on the individual credit card provider. Generally, it’s around every six to 12 months.
The good news is lenders will automatically increase your limit if they can see you’ve been looking after your credit responsibly – though you can opt out of this. Find out more about increasing your credit limit.
Can my credit limit affect loan approvals?
Yes, your credit limit can influence loan approvals. If you have a higher credit limit with low utilisation (in other words, if you’re not spending anywhere near what you could based on your credit limit), this can positively impact your credit score, making you a more attractive candidate for a loan.
Is there a fee for exceeding the credit limit?
Many credit cards charge an over-limit fee – often around £12 – if you exceed your credit limit. It's important to read your card's terms and conditions to understand any potential fees.
With almost 10 years’ experience writing, leading and managing content, Allie is an expert in personal finance and insurance products. She’s spent her career helping others quickly understand complicated topics, to help them save money and focus on what matters.
Our content is written by a Compare the Market expert, backed by data and enhanced by AI. Find out how we ensure accuracy and quality in our Editorial Guidelines.
What our expert says...
“You might think the higher the credit limit, the better. But remember your credit limit is exactly that: a limit, not a target. Only spend what you’re able to comfortably repay, or you could end up with problems further down the line.
If you can keep your spending to no more than 30% of the limit, this will indicate to lenders that you’re a responsible borrower and may help with future credit applications.”