A credit limit is the maximum amount you can borrow on a credit cardopens in a new tab at one time, set by your card provider. Our guide explains credit limits in depth to help you make sense of them and use your card responsibly. Find out what they are, how they affect you and how to manage them.

• Your credit limit is a borrowing cap, not a target
• It's calculated based on your finances, credit history and the type of card
• Consistently using close to your limit can hurt your credit score, as it shows that you're financially stretched
• Your limit can be changed over time. Your provider might offer you a new one, or you might be able to request a change yourself. 
• Want to raise the credit limit on a Capital One credit card? We'll contact you as soon as one's available

Your credit card provider sets the limit when you open an account. A credit limit is the maximum balance you're allowed to owe on a credit card – or the total you can spend. For example, if your card has a £2,500 credit limit, you can't use more than that without getting your payments declined - or potentially facing penalties, such as fees. 

All these related terms can get confusing. Here's how they differ:

• Credit limit – The maximum you can borrow on the card, set by your lender.
• Credit card balance – How much of that credit you've used and currently owe. This increases as you make purchases and decreases when you make payments. So if you've spent £400 on a card and not paid any of it back yet, your balance is £400.
• Available credit – The unused credit you still have available to spend, or your credit limit minus your current balance. So with a £1,000 limit and £400 balance, your available credit is £600. If you pay off £100, your balance goes to £300, your available credit rises to £700, and your overall £1,000 limit stays the same.

Top tip: Understanding these terms can help you manage a credit card effectively. Keep an eye on both your balance and available credit so you don't accidentally go over your credit limit.

If you're unsure of your limit on a particular card, it's usually easy to find out from:

• The welcome letter/email or the agreement
• Your credit card statement (paper or online) – usually near the top alongside your balance and available credit
• Your online or mobile banking account

Lenders decide your initial credit limit by assessing your financial profile and 'creditworthiness'. That's your reliability and ability to repay debt. Here are some key factors that go into that decision, and what might impact the limit you’re offered:

• Income and expenses – Lenders will assess what's left over after paying out your regular expenses. A higher income with manageable outgoings generally means a higher credit limit.
• Existing debts and credit – This might include outstanding loans and other credit card balances. If you already have large debts or cards with high limits, card providers might be wary of offering you much more.
• Credit history and score – A strong credit score and history of paying bills on time suggest you can handle credit responsibly, making lenders more comfortable. 
• Employment and personal details – Your job status and living situation can also influence the decision. Long-term employment and housing show stability to lenders.
• Customer relationship – If you already bank with a provider, they might be more likely to trust you with credit.
• Card type and policy – Different cards come with different limits. Think credit builderopens in a new tab cards for people with bad creditopens in a new tab, and rewards cards for those with higher incomes and credit scores.

Lenders ultimately set a limit that they think you’ll be able to repay. In the UK, this is a legal requirement set by the Financial Conduct Authorityopens in a new tab to protect you from getting into difficulties.

On average, credit limits tend to fall in the £3,000-£4,000 range for UK cardholders. This can vary, though. 

A 'good' credit limit is one that fits your needs and financial situation. Ideally, yours should be:

• Enough for your spending needs – It should be high enough to cover your expected monthly spending and occasional big purchases, without coming close to maxing out.
• Affordable – Your limit should be one you could realistically pay off if you ever did hit it (though remember you shouldn't be aiming for this).

When judging the first part, you'll want to think about what's called 'credit utilisation'.

Not directly. You won't get a higher credit score just because you have a high credit limit, and vice versa. But they are connected indirectly through how you use your credit, AKA your ‘credit utilisation ratio’.

• Low utilisation tends to have a positive effect (or at least avoids a negative effect) by showing you're not overstretched. 
• Consistently high utilisation can drag down your credit score as it's a sign of financial stress, even if you never miss a payment.

Find out more about why your credit score is so importantopens in a new tab and what can affect itopens in a new tab.

Going over your limit comes with potential consequences, depending on your card and provider. These include:

• Declined transactions (which can be inconvenient or embarrassing at checkout)
• Overlimit fees, usually around £12
• A negative mark on your credit report, which may hurt your score and make it harder to get credit in the future
• Interest rate increases for breaching account terms
• Losing out on promotional offers like low introductory rates on purchases and balance transfers

Many cards don't actually allow transactions that would take you over your credit limit, so having a purchase declined is often the worst that will happen. If lenders do allow spending over your limit, they need your consent first. But it's sensible to treat your limit as a hard boundary.

Try these practical tips to manage your credit limit effectively:

• Keep an eye on your balance ‒ Mobile banking appsopens in a new tab make this easy to do on the go. If you spot that you're getting close to your limit, rein in your spending or make a payment towards your balance.
• Set up automatic payments ‒ Using a Direct Debit to pay off your balance, either in full or a fixed amount, can stop things from snowballing. Plus, you don’t have to wait until your next statement to pay. You can always make additional payments to free up credit when your balance starts climbing. 
• Budget with your credit card like cash ‒ Add up your monthly expenses and avoid big impulse buys unless you have a plan to pay them off. Plus, try to leave a buffer for emergencies.

Yes ‒ your limit isn't fixed for life, and card companies often review accounts periodically. If you've been using your card responsibly, they may offer to upgrade your credit limitopens in a new tab. Or they might reduce your limit if you start missing payments or new issues show up on your credit report, like extra debts. They may even reduce your limit if your utilisation is low.

You also have the power to request changes to your limit if you'd like more spending power (increase) or would rather avoid the temptation (decrease).

It can be, but a higher limit isn't right for everyone. Perks include:

• Flexibility ‒ A credit limit enhancement lets you handle emergencies or big purchases without worrying about hitting your ceiling. You might not want to constantly watch your available credit before booking travel or buying a car, for example.
• Credit score buffer ‒ If you keep your spending habits the same, a higher limit means a lower utilisation ratio. This could help to boost your credit scoreopens in a new tab over time (or at least keep it strong).

There are also things to consider: 

• Overspending risk ‒ A bigger limit could tempt you to spend beyond your means, since the available credit is there. If you're not careful, this could leave you with a large balance that you struggle to pay off. It's why we'll never extend your Capital One credit limit without your go-ahead.
• More interest ‒ If you do have a big balance on a high-limit card and don't pay it back in full, you'll be charged more in interest. If you expect to repay slowly, try sticking to a credit limit you can manage.
• Future borrowing ease ‒ Having excessively high available credit, even unused, can sometimes make other lenders nervous. For example, when you apply for a mortgage, the provider might see that you could potentially run up £10k of debt overnight on your cards. This is usually only a risk if you have very high credit limits for your income.

You might be planning a big essential purchase, earning more or want a lower utilisation ratio. If you want to increase the limit of your credit card to match, there are a few ways this can happen:

As we touched on, card issuers will sometimes proactively offer higher limits as a reward for good card management.

They do this every few months to a year, especially on cards designed for building credit. You could earn up to two credit limit upgrades a year with Capital One. You'll get a notification saying you've been given an increase, or that one's available and you can accept it.

If you do want to extend your credit limit, here's how to boost your chances:

• Use your card regularly but not excessively ‒ Show you're actively using credit but staying within your existing limit.
• Always make payments on time ‒ A spotless record is key for building confidence. If you can't afford to pay off a full balance, try to pay over the minimum at least.
• Be patient ‒ If it's a new card, you'll likely need to have had it for at least 6-12 months.
• Improve your overall credit ‒ Some providers will periodically check your credit record. Showing improvement by managing other types of credit well could make them take note.

If you don't want to wait, you can contact your card provider directly to request a credit limit increase. You might be able to do this via online banking, an app or a phone call to customer service.

It's good to prepare as, if they’re able to offer an increase, they're likely to ask about the specific limit you're looking for as well as to check some financial information. They'll review similar factors to when you first got the card ‒ like your current income and credit score, plus your payment history with them.

Two tips when asking for an increase:

• Ask for a reasonable amount – Don't ask to double or triple your limit if your usage or income doesn't justify it.
• Choose your timing – Ideally after a string of good months or a credit score increase. Or wait until any negatives are at least a few months behind you.

Despite your best efforts, your lender could offer you a smaller increase than you asked for or decline it altogether. Try not to be discouraged. It's not a public mark on your credit report; only you and your bank know it's happened.

Here's what you can do next:

• Check your credit report – Request your report through the main referencing agencies, Experianopens in a new tab, Equifaxopens in a new tab and TransUnionopens in a new tab, or our handy CreditWiseopens in a new tab tool. Check for red flags like high utilisation or missed payments on other cards. If you spot errors, have them corrected.
• Improve factors in your control – For example, paying down other debts to increase your credit score or building a longer positive record. 
• Wait before reapplying – Resist the urge to request again immediately and give it a sensible pause – say, 6-12 months.
• Ask for a smaller increase – Request a more modest increase once enough time has passed.
• Consider a new card or balance transfer – If you really need the increase for practical reasons, you could do a balance transferopens in a new tab to a new card. This will free up available credit and give you a higher limit between the two cards. But you should only do this if you can get a good deal and pay off the balance.

You can check your eligibility before applying for a new credit cardopens in a new tab with our free online tool, QuickCheckopens in a new tab. It uses a soft search to estimate your chances, so it won't show up on your credit report.

Yes, as long as it's not lower than your current balance. You can request a voluntary decrease if you'd like to reduce your amount of available credit.

Keep in mind that this won't make your balance disappear. It'll just reduce your available credit and increase your utilisation ratio. Reversing a decrease if you change your mind or your circumstances change might not be easy, either.

Get started with QuickCheckopens in a new tab. You can get a starting credit limit of £200-£1,500 with up to two increases a year.