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What is a credit limit?
Put simply, your credit limit it’s the maximum amount you can borrow on a credit card.
How a credit limit works
Below we’ve provided a simplified example, just to show how credit limits work in practice.
If you go over your credit limit
- Your credit score could be affected, making it harder for you to get credit in future.
- Lenders may be less likely to provide new offers and higher credit limits in future.
How is your credit limit set?
Changing your credit limit
Many lenders offer the option to increase your credit limit if you need more flexibility on your existing credit card, or decrease it if you’d like to limit the amount of credit available to you.
Especially if you’re thinking of increasing your credit limit, ask yourself:
- Does this suit my borrowing needs, or should I consider other options?
- Will I be able to make repayments, even if my circumstances change?
It’s important to know that credit limit increase requests are subject to security and credit checks.
Where to find help
If you’re ever experiencing money worries, or would like additional support with Halifax products and services, please let us know so we can find a way to help.
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You can check your credit limit in a few ways:
- Refer to your latest credit card statement.
- Sign in to Online Banking or the Mobile Banking app to see a credit card account summary.
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We may decide to reduce your credit limit if we think you could find it difficult to make repayments. This is usually because of how you are using and repaying credit with us or other lenders.
We’ll look at information we hold about you and the accounts you have with us. We’ll also consider information sent to us by credit reference agencies about other types of credit you may have which includes details of your payment history.
Reasons include:
- Missed payments on Lloyds Banking Group products
- Adverse credit file information e.g. missed payments, defaults, CCJ’s
- High levels of total outstanding debt
- Exceeding pre-agreed limits e.g. bank overdrafts
- Taking out lots of new credit within a short period of time
If we decide to lower your limit, we’ll update our systems with the amount you can borrow straight away. We’ll send a letter to tell you about the change as soon as possible afterwards. It’s not an easy decision, but we want to make sure you don’t build up more debt than you can manage.
You’re welcome to apply for a credit limit increase in future, however you should wait 12 months. Allowing sufficient time for your circumstances or credit file to improve increases your chances of being approved.
In the meantime, you may like to review your credit report with credit agencies such as Experian and Transunion to check for accuracy.
If you have money worries or need support we’re here to help.
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Your credit limit isn’t set monthly or annually. It stays with you for as long as you have your credit card account, although it can increase or decrease over time, either because we’ve changed it, or you’ve requested a change.
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You can apply to increase or decrease your credit limit.
Increasing your credit limit
To increase, you’ll need to have at least 3 months payment history on your account. When you make your request, we might complete a credit check.
Think carefully before increasing your credit limit. Make sure that you’ll be able to make repayments if your circumstances change. And consider if there might be other options better suited to your borrowing needs.
Decreasing your credit limit
Decreasing could affect your credit score in the short term. The difference between the amount you’ve borrowed and the total amount of credit for you, affects the calculation of your overall score.
To change your credit limit
Increase your credit limit in our Mobile Banking app.
Increase or decrease your credit limit through Online Banking. From your credit card account summary, select ‘More actions’, then ‘Manage credit limit’. Sign in or register for Online Banking.
If you don’t bank online you’ll need to get in touch with us.
If we offer you a credit limit increase
From time to time, we might write to you offering a credit limit increase. You’ll have the option to accept or decline the offer, with at least 30 days’ notice. If you don’t accept it, the offer will simply expire – we won’t increase your credit limit without your consent. If you’d rather not to be offered credit limit increases you’ll need to get in touch with us to let us know.
A summary on credit limits
Your credit limit is the maximum amount you can borrow on a credit card.
- The credit limit offered is based on a lender’s assessment of your personal circumstances.
- Just like your credit score, your credit limit can go up or down over time.
- Your credit limit isn’t a target – it’s up to you to only borrow what you need and can repay.