People with good credit and a reliable payment history are typically more likely to qualify for higher credit limits than those with lower scores or less consistent histories. With that in mind, there are a multitude of factors that can go into how a lender determines your credit limit including everything from employment status to existing monthly financial obligations to credit scores. While a higher credit score is more likely to ensure you qualify for better options, lower credit is not inherently disqualifying. In fact, regularly paying off your credit card can be an important factor in improving your overall credit — so if you’re offered a higher than normal APR (due to existing credit imperfections) it can be worth using to prove your reliability to a lender.
It’s also important to remember that your credit limit is not permanent. Through either a lender-initiated or customer-initiated process, your credit limit can be increased. While individual lenders will have their own specific criteria for determining a customer-initiated request, many lenders will periodically re-evaluate customers (particularly their payment history) and offer lender-initiated increases if they like what they see. Of course, having a lower credit limit can be important for users who might need help reigning in their spending. For some, the temptation to spend with a higher limit can be problematic so making sure to look into your lender’s limit options is important. Remember you can always decline a credit limit increase if it is offered to you.