Is your credit card limit holding you back or keeping your spending in line? When we get our first credit card our $2,000 credit limit can feel like a licence to shop, a year later we get a letter offering us an increase and we accept, thinking it can do us no harm. However, unless you are making very large purchases do you really need a credit limit in the tens of thousands?
All credit card providers have a different credit card limit they offer to their customers. A credit card limit is the amount of debt you can accrue on your card. The most common credit card limit providers offer is $5,000 however the average credit card debt is higher.
There are some providers that offer an infinite credit card limit to customers that meet certain criteria such as their value of assets and income. Most providers determine your credit card limit by your credit rating, assets and how much you earn to determine whether you are able to pay off the debt. You can also ask to change your credit card limit at any time and the smaller the limit the better when going for a loan.
Most banks will allow you to lower your credit card limit online or request a credit increase. Remember, just because your bank is offering you a credit increase doesn’t mean you have to accept it. Make sure you can meet the higher monthly payments and a higher credit limit.
Every credit card comes with different interest rates and perks. Find the best one for you and set a limit which will allow you to easily make your monthly payments.
Compare some of Australia’s best credit cards to narrow down the search for your ideal credit card companion.