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How to find a credit limit that’s right for you
Thinking of applying for a new credit card? Make sure you consider a credit limit that aligns with your spending habits, your intentions for getting a card and your ability to repay your card balance.
Already have a credit card but want to change the credit limit? You’ll find information on that here too.
What is a credit limit?
Put simply, a credit limit is the amount of credit a financial provider will lend you.
For example, if you’re given a credit limit of $1,000 on your card, the most you can have owing on that card will be $1,000. The credit limit doesn’t only include purchases, but also interest, and fees and charges made to your card.
How are credit limits decided?
When you apply for a new credit card, you’ll get the opportunity to request the credit limit that you’d prefer. Ultimately, your financial provider will offer you a credit limit that it considers appropriate to lend you based on your ability to pay off the card balance. If your application is approved, this amount may be lower than what you requested.
Your ability to repay a credit card may be influenced by a number of things, including your income, expenses, and spending habits. These are all factors you should also be taking into consideration when deciding what limit to apply for.
- Why a lower limit could be a better fit
There are a couple of benefits of having a lower limit on your credit card. First up, with a lower limit, there may be less temptation to spend. Reducing your total line of credit may also influence you to pay off your existing balance before incurring further expenses on your credit card.
Another thing to keep in mind is that a higher credit card limit can also affect things such as home loan applications. A lender may look at the limit on your credit card – not how much you currently owe – when assessing your home loan application (more on this below).
It’s important to consider your financial situation and intentions for getting a credit card. Depending on your reasons for getting a card, you may be restricted in your ability to meet unexpected expenses, or make larger purchases, if you opt for a lower credit card limit.
- Don’t push the limit
You may be tempted to opt for a higher limit on your credit card, but what if your credit card balance blows out following an unexpected expense?
A higher limit may assist in making larger purchases. However, you may be faced with the prospect of having to pay off the outstanding balance on your credit card on top of your budgeted living expenses.
Bearing in mind any other financial responsibilities you may have; it might help to look at your financial situation and see if you could add a line item to your budget to reduce or pay off your card balance as early as possible.
A lower credit card limit may make this task easier – it’s far less daunting to pay off a $3,000 credit card balance than a $15,000 one, right? Bear this in mind when considering what limit is appropriate for you and what limit you want to apply for.
Things to consider when weighing up credit limits
Can I change my credit limit?
- Decreasing your limit
You always have the option to request a decrease in your credit limit from your financial provider (unless you’re already at the minimum credit limit available for your card type).disclaimer If you wish to have a lower credit limit than is available on your card, it may be time to change your card type. For more information see choosing the right credit card for you.
- Increasing your limit
It may be possible to increase your credit limit. Talk to your financial provider about your options.
Comparing apples with apples just got easier
Comparing credit cards not your idea of a good time? Check out our compare cards tool. It gives you side-by-side comparisons to make choosing easier.
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Information in this article refers to personal credit cards, is general in nature only and does not take into account your personal objectives, financial situation or needs.
By providing this information ANZ does not intend to provide any financial advice or other advice or recommendations. You should seek independent financial, legal, tax and other relevant advice having regard to your particular circumstances.
The information is current as at 7 February 2025 and may be subject to change. ANZ recommends you review your personal credit card contract for information about the terms that apply to you.
ANZ interest rates and fees and terms and conditions are subject to change. Refer to the current credit card interest rates, fees and terms for further information and current interest rates, fees and terms.
Applications for credit at ANZ are subject to ANZ's credit approval criteria, terms, conditions and fees and charges apply. Australian Credit Licence Number 234527.
At ANZ, if a consumer Credit Card Account has interest-free periods on purchases, the account holder can avoid paying interest on the purchases balance by always paying the full Closing Balance (or if applicable, the ‘Adjusted Closing Balance’) shown on each statement by the applicable due date. The Adjusted Closing Balance is calculated as your Closing Balance less the sum of any relevant Promotional Plan balances that relate to an Instalment Plan, a Buy Now Pay Later plan, or a Promotional Balance Transfer Plan, plus any instalments due (including instalments previously due which have not yet been paid). If the account holder doesn’t pay the full Closing Balance (or if applicable, the ‘Adjusted Closing Balance’) shown on a statement by the applicable due date, they will generally be charged interest on their purchases balance from the day after the Due Date shown on that statement. Not all transactions (e.g., cash advances) get the benefit of interest-free days. Refer to the applicable credit contract for details.
ReturnMinimum credit limits apply to some credit cards. Refer to the product terms and conditions for details.
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