Your credit card limit explained
Your credit card limit explained
Your credit card limit is the maximum amount of money you can borrow on your credit card - the limit of credit you’re allowed to borrow. Your credit card limit is based on a number of things such as:
- How much you earn.
- Any outstanding debts.
- Credit history.
- Access to other credit facilities.
- Customer history.
Credit limits on credit cards
Your credit card limit is the maximum amount of money you’re allowed to borrow on your credit card. For example, if your credit card limit is £2,000 and you’ve got an outstanding balance of £1,750, you can spend a further £250 before you reach your credit card limit. However, if you borrow right up to your limit, there’s a risk you could go over it when any interest is applied.
Most customers can find out what their likely credit limit will be when using our eligibility checker – Clever Check.
It’s important not to exceed your credit card limit. It may adversely impact your credit rating and your card could be declined the next time you try and use it.
How your credit card limit is decided
Your credit card limit is based on:
- How much you earn and your disposable income after paying your household bills and other regular costs.
- Any outstanding debts, like mortgages, loans and other credit cards - and how they stack up against your income.
- Your credit history and how well you’ve previously managed credit - such as whether you’ve missed or made any late payments or gone over your credit limit.
- Access to other credit facilities, such as the availability of an overdraft on your current account or other credit limits on credit cards you may have as these could cause you to be over-indebted.
- Customer history - How you’ve managed any existing accounts with the lender you’re applying to.
How to change your credit limit
You can request a credit limit increase using Online Services, the MBNA app, or by giving us a call.
We require at least three months payment history on your account before you can request an increase of your credit limit. You can decrease your credit limit at any time after your card has been activated.
If you request a credit limit increase, this authorises us to search the files of any credit reference agency we need to help us make a decision. We may not offer you credit limit increases if we are concerned about your ability to repay.
When deciding whether to increase your credit limit, you should think carefully about whether this is the right option for you. You should consider the risk of taking on too much debt and how you will repay any amounts owed.
From time to time we may write to you offering a credit limit increase. If this happens, we will give you 30 days’ notice before any change will take effect. Should you want to decline the change, call 03456 062 062. Lines are open 8am – 8pm, seven days a week. Standard network charges may apply.
Not all Telephone Banking services are available 24 hours a day, seven days a week.
Reasons why your credit limit may be reduced
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.