What is a credit limit?

Understanding credit

A credit limit is the maximum amount you can spend on a credit card. Your card provider will set your limit when you take out your credit card but it can change depending on how you use it. Sticking to your limit is important for building better credit. In this guide, we’ll help you understand how credit card limits are set, what you can do to increase and decrease your credit card limit, and whether you should.

How is your credit limit set?

Your credit card provider will use the information you’ve provided on your application along with your credit report to set your credit limit when you sign up for your card. The main factors they’ll look at are:

  • Income – how much you earn and how much is left after your monthly expenses.
  • Debts – any current credit card or other debts, such as loans and mortgages.
  • Available credit – the limit on any other credit cards you have.
  • Credit history – how you’ve used credit in the past, particularly whether you’ve missed payments.

Most providers will give the range of the potential credit limit they offer on a specific product. However, you’ll only know your individual set limit once you’ve submitted a full application and have been accepted.

If you’ve been accepted and are not happy with the credit limit offered, you can choose to not sign the card agreement, but bear in mind that the application will still show up on your credit report.


Can you go over your credit card limit?

This will depend on the terms of your individual credit card. If it’s possible to go over your limit – it’s not a good idea. Going over your credit limit may affect your credit score. You should do all you can to avoid going over your credit card limit.

Spending over your set limit may have negative consequences both now and in the future, which could include:

  • Your card company may charge you a fee for going over your limit.
  • Your credit report may be marked, which could make it harder to get credit in the future.
  • Your card provider may increase your APR.
  • You may lose any promotional interest rates, e.g. a 0% offer on balance transfers


If you have an Aqua card, we’ll send you a message if you’re getting close to your credit limit. It’s important to get in touch with your provider as soon as you realise you’ve gone over your limit and try to pay off the excess balance as soon as possible.


Credit card limit increases


Your credit card provider may increase your credit limit from time to time, if you make your payments on time and stick to your existing limit. 

You can also ask your provider to increase your credit limit. It’s worth thinking about why you want to increase your limit, how you’ll use any increased limit, and whether you’ll be able to make repayments.

For example, if you need to pay for essential repairs to your car but have worked out a repayment plan, then it might be sensible to increase your credit limit. However, if you’re planning a holiday and just want a bit more spending money, then increasing your limit might not be such a good idea. Remember: a higher credit card balance means more interest .

If you do want to increase your credit card limit, there are a few things you should be doing:


  • Use your card regularly – and pay it off. Using your card sensibly shows your card provider that you’re responsible with credit.
  • Don’t go over your limit – if you can, try not to use the whole of your existing credit limit. It helps to show credit providers that you’re in control of your spending.
  • Be patient – wait until you’ve had the card a few months. You’re more likely to get an increase if you’ve had your card a little while because your card provider has more time to see how you use your existing credit. 
  • Don't keep asking – making lots of requests to increase your limit can affect your credit score because your card provider will run credit checks when you make a request.
  • Never miss a payment – it’s so important that it’s worth saying again. Even a payment that’s one day late could impact your chances of getting more credit in future.


Does a higher credit limit help?

Not necessarily. If you’re regularly using all of your credit limit – no matter what it is – it’s a sign that you may not be managing your credit well.

On the other side, having a higher credit limit can help to show that you can be trusted with credit, but the bigger impact can be on what’s known as your credit utilisation ratio.



What’s a credit utilisation ratio?


Your credit utilisation ratio (or credit utilisation rate) is the amount of credit you’re currently using divided by the amount of credit you have available to you. For example, if you only have one credit card with a limit of £500 and a balance of £50, your utilisation ratio is 10%.

The important thing to remember is – as far as your credit utilisation ratio goes, the less of your credit you’re using, the better. A utilisation ratio of 10%, as in the above example, looks better on your credit report than a ratio of 95% because it shows lenders that you’re managing your money and that you’re not stretching your finances.

It only applies to credit cards and other forms of credit that don’t have a pre-determined end date, which means mortgages and loans don’t count, but it can still be an important factor in your credit score.

Can I decrease my credit card limit?

Yes – you can ask to reduce it at any time, for example, if you find you’re not spending anywhere near your credit limit. If you’re happy with your existing limit or worried that a higher limit might tempt you to spend more, you can also reject any increase your card provider offers.

Alternatively, if you don’t want to increase your limit at all, you can ask your card company to opt you out of and increases. With Aqua, you can do this using your Online Account Manager or using our automated customer service phone line.

How often do Aqua increase credit limits?

There’s no set amount of time for us to consider increasing your credit limit. We continuously monitor your account to see how you’re getting on and may increase your limit, so long as you’re making your monthly payments and sticking to your current credit limit.

About Aqua credit limits

If you apply for an
Aqua card, the credit limit we offer will be based on your personal circumstances. To give you an idea, we’ll provide an initial limit of between £250 and £1,200.

How can an Aqua card help?

Aqua Card

Aqua Classic

We can help you start your journey to building a better credit score when you manage your account well. Our most popular credit card, the Aqua Classic could help improve your credit history. We continuously monitor your account and could even offer to increase your credit limit after four months of good credit behaviour.

Learn more about Aqua Classic

Aqua Advance

Reduce your rate over three years if you stay within your credit limit and pay on time. Want a longer-term solution? Aqua Advance reduces your interest rate over time. Keep making your payments on time and stay within your credit limits, we'll drop your interest rate every year for three years. All while you build a better credit score!

Learn more about Aqua Advance

Don't forget

Failure to make payments on time or to stay within your credit limit means that you will pay additional charges and may make obtaining credit in the future more expensive and difficult.

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