Credit limit
Cards & borrowingThe maximum amount you can borrow on a credit card or overdraft at any one time.
Overview
Your credit limit is set by the lender and can change based on your account history and affordability.
Using a large portion of your limit can impact your credit utilisation and score.
Why it matters
- Higher limits can reduce utilisation if spending stays the same.
- Maxing out a limit can hurt your score and affordability.
- Limits affect how lenders view your available credit.
FAQs
Does increasing my credit limit improve my score?
It can help if your spending stays the same because utilisation goes down. It does not guarantee a higher score.
Is it bad to use most of my credit limit?
High utilisation can be viewed as higher risk, so it is usually better to keep balances lower.
Related terms
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