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The average credit limit on credit cards in the U.S. was $29,855 as of the end of the third quarter (Q3) of 2023. That's a 6.8% increase from Q3 2022, when the average credit limit was $27,955. Average credit card limits vary by age range, and cardholders who are new to credit, rebuilding their credit or have lower incomes may also have lower credit limits.
What Is a Credit Limit?
A credit card's credit limit is the highest your balance can go before the card issuer can start declining new transactions due to a lack of available credit. Once your balance reaches the credit limit, you can pay it down to free up credit.
A higher credit limit can be helpful if you want to make large purchases. But if you pay less than the full statement balance, you might wind up carrying a large balance and accruing a lot of interest.
Average Credit Limits
While the overall average credit card limit was $29,855 as of Q3 2023, the average credit limit varied widely by generation. In general, these generational differences mirror the changes that many people experience in their income and credit usage as they age.
For example, Generation Z collectively had the largest year-over-year increase (14.3%) in credit limits. But their average credit limit of $12,899 was still the lowest of any generation. Card issuers consider many factors—including income and length of credit history—when deciding credit limits, which could be why younger people tend to have lower credit limits.
In terms of dollar amount, Generation Z's average credit limit increased by $1,599. That's about the same increase baby boomers had ($1,588), which was a 3.9% increase for that group.
| Change in Average Credit Card Limits by Generation | |||
|---|---|---|---|
| 2022 | 2023 | Change | |
| Generation Z (18-26) | $11,290 | $12,899 | +14.3% |
| Millennials (27-42) | $24,668 | $27,533 | +11.6% |
| Generation X (43-58) | $35,994 | $38,665 | +7.4% |
| Baby boomers (59-77) | $40,318 | $41,906 | +3.9% |
| Silent Generation (78+) | $32,379 | $32,812 | +1.3% |
| All Generations | $27,955 | $29,855 | +6.8% |
Source: Experian data from Q3 of each year; ages as of 2023
How Do Credit Card Companies Decide Your Credit Limit?
When you apply for a new credit card, the card issuer might determine your initial credit limit based on various factors, including:
- Your credit history and credit scores
- Your income and debt-to-income ratio (DTI)
- Your history with the card issuer
- The card issuer's policies and goals
- Current economic conditions
Generally, good credit scores and income can lead to higher credit limits, but it's not always that simple.
For example, a credit card issuer may review your credit, income and monthly payments to determine how much credit it wants to offer you overall. If you already have a high credit limit or you have several cards with the issuer, the card issuers may be unwilling to extend you additional credit, even if you have an exceptional credit score.
Factors outside your control may also impact your credit card limits. For instance, credit card issuers may change credit limits based on the current economic environment, business goals and whether they're trying to encourage customers to spend more money or limit their potential losses from missed payments.
How to Increase Your Credit Limit
Increasing your credit limit can make it easier to use your card to cover purchases, especially when you're making large or frequent purchases. A higher credit limit may also help your credit scores because it can lead to a lower credit utilization rate—an important scoring factor.
You can try to increase your credit limit by doing the following:
- Update your income information. Keep your income information up to date with your card issuers by updating your profile whenever your income increases. Card issuers might proactively increase your credit limit as your income rises.
- Transfer available credit from other cards. If you have several cards from the same issuer, you may be able to transfer your available credit between the cards. Although this won't increase your overall credit limit, it could give you more available credit on the card you use most often. You can look for a transfer request option in your online account, call the company or send a message to request a transfer. Some card issuers don't allow these types of transfers.
- Ask for a credit limit increase. You can also ask your card issuer for a credit limit increase. It might be best to wait until your credit score, income or DTI has improved—or until you've established a track record of making on-time payments and paying down your card's balance. However, the request might result in a hard inquiry, which may hurt your credit scores slightly even if the card issuer declines your request.
- Focus on improving your credit. Card issuers monitor cardholders' credit reports and scores, and improving your credit scores could lead to automatic credit limit increases.
If you don't receive a credit limit increase right now, you could look into applying for a new credit card instead. You can also continue to focus on the factors that might help you get a higher limit, such as increasing your income, improving credit scores and paying off debts.
Also, keep in mind that you might not be able to submit one request after another. And if you're asking for an increase to a specific amount, a practical request could make more sense than trying to double or triple your credit limit.
Frequently Asked Questions
Your credit limit can affect your credit scores, but not directly. Credit scores consider your credit utilization ratio by dividing your card's reported balance by its credit limit. Credit card utilization can be a significant scoring factor, and a lower utilization ratio is best for your credit scores.
Credit scores may consider your overall credit utilization rate—from all your revolving accounts—along with the utilization on individual accounts. Having higher credit limits can be beneficial because high limits make it easier to maintain low utilization rates.
Credit scores aside, card issuers might consider the amount of available credit you have on existing credit cards when reviewing your application for a new card and setting your card's credit limit.
Many factors can affect your card's credit limit, including your credit history, credit scores, income, experience with the card issuer, the type of credit card, the card issuer's policies and current economic conditions. You might expect to receive a lower credit limit if you have limited or poor credit, a low income or you already have a lot of available credit on other credit cards.
Your transaction will generally be declined if you try to go over your credit limit. However, card issuers have the option of approving over-limit transactions on a case-by-case basis. If they do, the over-limit amount could be added to your minimum payment on your next bill.
Yes, credit card companies can lower your credit limit at any time. For example, your card issuer might lower your credit limit if it thinks you've lost your job, noticed you're carrying a larger balance than usual or sees that you've missed payments on other accounts.
If your credit limit drops below your current balance, you have at least 45 days to bring your balance down to the new limit before the card issuer can charge a fee or add a penalty rate to your account. The card issuer also has to send you an adverse action letter when it negatively changes your account's terms.
The Bottom Line
Your credit limit is determined by a variety of factors, some of which you can improve by continuing to grow in your career, responsibly managing your credit and keeping card balances low. If desired, you can also ask your credit card issuer to increase your credit limit. They'll be more likely to grant your request if you've made improvements since opening your card account, such as by increasing your income or credit score.
Monitoring your credit report and score could help you determine when it might make sense to ask for a credit limit increase. You can use Experian's free credit monitoring to get your monthly updated credit report and credit score based on your report. Experian also matches its users with credit card offers based on their unique credit profile. Opening a new card can give you more available credit and come with extra benefits, such as an intro bonus or promotional interest rate.