What Is An Average Credit Card Limit? (2024)

A credit card limit is the maximum amount a cardholder is allowed to spend using a credit card. It essentially acts as a loan maximum that the cardholder must pay back (normally every month) before being allowed to spend more money. The higher the credit limit, the more money the borrower is allowed to charge on a credit card.

If the cardholder attempts to charge purchases using a credit card past the maximum credit limit, the card may be declined at the time of purchase or the cardholder may be charged a penalty fee. To avoid this, it’s best to pay off every credit card’s balance by the end of each monthly billing cycle. Otherwise, most credit card issuers will charge interest (known as the Annual Percentage Rate, or APR). Interest accrued on balances counts toward the credit limit—which leads to less available credit and to a higher credit utilization rate.

Experian data from Q3 2022 shows American consumers had an average total credit limit of $28,930 across all revolving credit accounts. However, this average doesn’t tell the whole story.

• Generation Z (Born after 1996): $11,290
• Millennials (1981 – 1996): $24,668
• Generation X (1965 – 1980): $35,994
• Baby Boomers (1946 – 1964): $40,318
• Silent Generation (1928 – 1945): $32,379

As you might expect, the numbers skew much higher for certain generations, while younger consumers tend to have much lower credit card limits. In 2022, Generation Z (ages 18-25) averaged a total credit limit of $11,290 across all credit accounts, far lowest among the five generations presented. Baby Boomers top the list with a $40,318 total credit limit on average.

A credit card issuer will review several factors to determine what a cardholder’s credit limit will be. Typically, this happens when someone applies for a credit card with that issuer for the first time. Annual reviews may also occur after issuance.

Employment Status and Annual Salary

Card issuers often want to know whether applicants are employed and what their annual salary is. This helps them calculate how much money applicants have at their disposal to make payments on time.

Monthly Rent or Other Bills

Card issuers may inquire about the applicant’s monthly housing costs (rent, mortgage payments, etc.) as well as any loan payments or utilities. This is to evaluate an applicant’s financial situation in a general sense.

Credit Utilization

Credit utilization is the percentage of used credit out of the available credit amount that a cardholder has across all accounts. We recommend keeping credit utilization under 30% to maintain a good credit score. Lower credit utilization also helps boost credit card limits.

Credit History

A credit card issuer will always analyze an applicant’s credit history to determine how much their credit limit should be. This is why younger applicants (like college-age folks) typically get lower credit limits when approved for their first credit cards. To a lender, an applicant’s shorter history means less of a guarantee the applicant will be able to pay off the balance.

Younger cardholders who have a short credit history will usually have lower credit limits. As their credit history grows (assuming they make payments on time and pay off their balances), so will their credit limit.

Low credit limits also mean making large purchases with a credit card becomes slightly more risky than for those who have a higher limit. As a general rule of thumb, it’s best to keep credit utilization under 30%. If a cardholder’s combined credit limit is only $1,000, any number of purchases over $300 will lead to a higher-than-recommended credit utilization. Over time, this could lead to a lower credit score for the cardholder.

Higher credit limits allow the cardholder to make large purchases without fear of passing their maximum recommended credit utilization. It also sends a positive sign to other lenders when a cardholder makes a major financial decision, like applying for an auto loan or a mortgage.

A credit card issuer will regularly ask a cardholder to update employment information (this may occur annually). This is required because employment status and salary increases allow higher credit limits. Credit scores that grow over time can also lead an issuer to increase a cardholder’s credit limit. These are some of the easiest and least-costly ways to increase a credit limit.

If the cardholder wishes to ask in advance for an increased credit limit, they can sometimes do this online. It may often be best, however, to call the number on the back of the card to speak with a representative over the phone. This is particularly useful if the cardholder is not sure whether they’ll get approved based on personal financial factors.

Asking for a credit limit increase can work if the cardholders’ goal is to lower their credit utilization while paying down the balance on their account or other accumulated debt. It’s not advisable to ask for a limit increase if the goal is to simply have more money to spend without a solid plan to pay it all back. Instead, the cardholder should try to pay down their balance on the card before asking to extend more credit.

A good credit limit varies depending on the person and situation. Individuals have different needs and may be at different points in their credit and financial journey. The credit limit for someone with consistent income and a long-established credit history with a premium credit card will start with a much higher credit limit than someone with poor or limited credit applying for a secured credit card.

Similarly, the credit limit for a young adult with a student credit card will be lower because these cards are designed to build credit. Someone with a positive payment history and a low credit utilization ratio may qualify for an above-average credit limit.

Credit card issuers typically do not publish credit limit ranges. You won’t know your credit limit until after you apply and are approved for a credit card.

Younger, college-age cardholders may experience lower credit limits as they begin their credit journey. Credit card limits can increase almost naturally as a cardholder’s salary increases and associated credit scores improve. Higher credit limits are useful for making large purchases with a credit card, and they can send positive signs to lenders for other financial goals. So, asking a credit card issuer to increase a card’s credit limit is a good idea as long as there’s a solid plan to pay down debt and reduce credit utilization.