When you are approved for credit, the creditor puts a credit limit on your account. This is the maximum balance you can carry and helps keep your credit card charges at a level you can pay.
Each card issuer has its own standards for setting credit limits. Some factors that may affect their decision are:
- Your monthly income
- Current debt (other credit cards, car loans, student loans, etc.)
- Length of residence at your current address
- Home ownership
- Number of times you've applied for credit
- How much credit you need or use
You may ask your credit card company to increase your credit limit, but that answer will depend on your total financial picture. You may qualify for a higher credit limit if your income has increased or your debts have decreased. You may also qualify if you always pay on time, pay more than the minimum payment due or pay your balance in full.