You’re not the only one who’s curious about how your first credit card limit compares to the average. Many people are interested in learning what to anticipate when they apply for credit for the first time.
The good news is that there’s no one-size-fits-all answer to this question. Your credit limit will be determined by a number of variables, such as your income, credit history, and credit score. But we can look at some broad patterns to get a sense of what to anticipate.
According to a recent report from Experian, the average credit limit for a first credit card is $3,000. However, this number can vary widely depending on the individual. For example, someone with a high credit score and a steady income may be able to qualify for a credit limit of $5,000 or more, while someone with a lower credit score or no credit history may only be able to get a credit limit of $1,000 or less.
It’s important to remember that your credit limit is just a starting point. Your credit limit may rise over time as long as you use your credit card sensibly and pay your bills on time. Actually, a lot of credit card companies will raise your credit limit automatically for you after a predetermined amount of time or after you meet a predetermined spending threshold.
So what’s the average credit limit on your first credit card? It depends. But as a general rule of thumb, you can expect to get a credit limit of between $1,000 and $5,000.
How to Increase Your Credit Limit
There are a few ways to raise your credit limit if you’re not happy with it currently. Here are a few tips:
- Make your payments on time. This is the most important factor in determining your creditworthiness.
- Use your credit card responsibly. Don’t max out your credit limit, and try to pay off your balance in full each month.
- Keep your credit utilization low. This is the percentage of your available credit that you’re using. Aim to keep your credit utilization below 30%.
- Become an authorized user on someone else’s credit card. This can help you build your credit history without having to open your own credit card.
- Request a credit limit increase. You can do this by contacting your credit card issuer and asking for a higher limit.
The Bottom Line
Your credit limit is an important factor in your overall credit health. By understanding what your credit limit is and how to increase it, you can take steps to improve your credit score and qualify for better interest rates and terms on loans.
Here are some additional resources that you may find helpful:
- Experian Credit Report: https://www.experian.com/
- Equifax Credit Report: https://www.equifax.com/
- TransUnion Credit Report: https://www.transunion.com/
- Credit Karma: https://www.creditkarma.com/
- NerdWallet: https://www.nerdwallet.com/
Frequently Asked Questions
Q: What is the average credit limit for a first credit card?
A: The average credit limit for a first credit card is $3,000. However, this number can vary depending on the individual.
Q: How can I increase my credit limit?
A: You can increase your credit limit by making your payments on time, using your credit card responsibly, keeping your credit utilization low, becoming an authorized user on someone else’s credit card, and requesting a credit limit increase.
Q: What is credit utilization?
A: Credit utilization is the percentage of your available credit that you’re using. Aim to keep your credit utilization below 30%.
Q: What are some good credit cards for first-time users?
A: There are many good credit cards for first-time users. Some popular options include the Discover it® Cash Back, the Chase Freedom Unlimited®, and the Capital One Platinum Credit Card®.
Q: How can I improve my credit score?
A: You can improve your credit score by making your payments on time, using your credit card responsibly, keeping your credit utilization low, and becoming an authorized user on someone else’s credit card.
Additional Resources
- Experian Credit Report: https://www.experian.com/
- Equifax Credit Report: https://www.equifax.com/
- TransUnion Credit Report: https://www.transunion.com/
- Credit Karma: https://www.creditkarma.com/
- NerdWallet: https://www.nerdwallet.com/
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If this is your first credit card, you’re probably curious about what your credit limit will be upon approval.
Your credit limit is an important factor with any new card. It represents the maximum amount of credit available to you. Lenders use the data in your credit report and application to establish your credit limit when you are granted a credit card. But some types of credit cards are known to have lower credit limits than others.
The typical credit limit you should anticipate on your first credit card is described below by Select, along with information on how to eventually raise this limit.
The average credit limit for new “bank card originations,” or completely new account openings, has been between $5,000 and $6,000 in 2018 and 2019, according to data from credit bureau Equifax’s “Credit Trends” report.
A representative for Equifax tells Select, “However, many consumers new to credit start with a private label retail credit card, such as a retail store credit card.” “Those beginning limits have averaged between $2,000 to $2,500 during this same time period. “.
Since many customers apply for store cards as their first credit card, the credit limit on your first credit card will typically be low. While Equifax reports that the average credit limit for these retail cards is between $2,000 and $2,500, credit limits can be significantly lower, sometimes even below $1,000.
“Limits on those cards are notoriously low,” financial expert John Ulzheimer, formerly of FICO and Equifax, tells Select. Additionally, if your first credit card is secured, the limit will probably be extremely low. “.
Because secured credit cards require an upfront security deposit (usually $200), which serves as your credit limit, they are primarily marketed to consumers with very little credit history. This means your limit wont be that high, but they are a great way to start building credit. Some of the best secured credit cards are the Citi® Secured Mastercard®, which has low interest from a major bank, and the Capital One Platinum Secured Credit Card (see rates and fees), which has a low deposit requirement.