Credit Limits

How are credit limits determined on credit cards? 

How much credit you are extended on a card corresponds to your income level, credit history, and your FICO score. There are lenders that offer a preset limit, and that limit will apply to anyone who’s approved for the card. Whether or not you get approved, however, will depend on your credit score as well as your income.  Other credit card issuers don’t set a limit they do a more involved analysis of each customer’s finances to determine a max

amount. 

One thing to keep in mind about credit card limits is that having

a higher one isn't necessarily better. Remember, credit card companies

make money by collecting interest on unpaid balances, so if you max out

your card's limit and spend months paying it off, you'll end up paying

out more money than necessary for whatever you used your card to buy.

Like most things in life there’s pro’s and con’s and a higher credit limit

can be good or bad.