Question: What factors determine the credit limit you get on a new credit card?

Answer: This is a great question, and the answer is simply that your credit limit is based mostly on your credit score. A couple of important factors a creditor considers are your income and your ability to repay. So not only is the amount of money you earn important but so is your debt-to-income ratio. If you were a lender, would you want to loan $4,000 to a client with $400 income and $300 debt? So, income and current debt ratio is important.

The length of residency often comes into play when establishing limits, too. If you relocate from place to place frequently, you could be considered less stable. Lenders clearly want to see stability when establishing your credit limits.

The final major factor in granting credit is how many other credit cards you have. The more credit cards you have, the less likely creditors will grant you a higher limit. However, if you've had the same credit card or cards for a long period of time, that would nullify the issue of having too many cards. Again, it's a reflection of your stability. A history of long term timely payments demonstrates stability.

I would further suggest obtaining a copy of your credit report at This is the only place you can get a free copy, and you are entitled to one free copy from each of the credit bureaus once a year. I recommend you print the report before migrating away from the page displaying your report, because once you leave that page, you will have to pay to see your report again until another year elapses. The reason for checking your report is to have an opportunity to correct any errors you are not aware of. When trying to maximize your credit limit the last thing you need on your report are errors.

Featured Partner Cards