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What is a credit limit?

How borrowing is limited and what that means for you.

Your credit limit is the maximum amount of money, in total, you can borrow on your credit card at any one time.

  • An initial amount is set by your provider when you apply for your card, but this can change over time.
  • It’s usually based on your individual circumstances and credit score.
  • Remember, it’s still up to you to only borrow what you can afford.
     

How much can I borrow on a credit card?

Your credit limit tells you exactly how much you’re allowed to borrow. To show you how a credit limit works, we’ve simplified the example below. For more detail, visit our page on how a credit card works.

1. Your new credit card has a credit limit of £1,000

You start off with £1,000 of borrowing available for you to use. This credit limit can change over time, but for this example let’s say it doesn’t.

2. Using your credit card reduces your available credit

‘Available credit’ is the remaining balance you can still use before reaching your overall limit. So, if you spend £400 on a car repair, you now have £600 of available credit left.

3. Paying off your balance increases your available credit

If, after your car repair, you pay £100 towards your balance – as well as any interest charged – your available credit will go up to £700. Note your overall £1,000 credit limit has not changed.

Your credit limit is a maximum, not a target

If you get into a habit of always using all of your credit limit, this might be noted on your credit score.

What happens if you go over your credit limit?

  • Any transaction that might take you over your credit limit may be declined.
  • If you exceed your limit, you may have to pay some fees.
  • You could also lose any promotional rates you have, which could go on your credit history and affect your credit score.
  • It might also change how we view your ability to repay borrowing. 
  • So, it’s important to always stay within your credit limit.

How is your credit limit calculated?

Your credit limit is usually based on your credit score and personal circumstances. Below is some of the information we use to decide.

  • The application you submit.
  • Information from a credit reference agency.
  • Your history with us.

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How can I increase my credit limit?

Every credit card provider has a different process. There are two ways that you can request credit limit increases from us. Although, we’ll only offer you an increase if we think you can afford it.

1. Request a credit limit increase manually

At Lloyds Bank, you can easily request a one-off credit limit increase by logging on to Internet Banking or using the Mobile Banking app.

2. Opt in to be regularly reviewed for credit limit increases

Secondly, you can opt in to be automatically reviewed for credit limit increases on a regular basis. This means you don’t need to keep manually requesting increases.

Frequently Asked Questions

  • You’ll find your credit limit on your credit card statement, whether you receive digital or printed copies.

    If you log on to Internet Banking or our Mobile Banking app, you’ll also be able to see the credit limits of your different cards there.

    Log on to Internet Banking

  • Yes. Although, this process varies depending on your provider.

    You can usually request a credit limit increase, but you’ll need a payment history of at least six months on your account and you’ll have to go through an eligibility check, so approval isn’t guaranteed.

    You can usually request a credit limit decrease whenever you like.

  • Your credit limit may be reduced for a range of reasons – such as a change in the products or services your provider offers, or a change in law or regulation.

    Some banks will decrease your credit limit, or even limit your ability to use your card, if they reasonably believe that there’s a significantly increased risk that you will not be able to repay what you owe.

    If we ever do this, Lloyds Bank will always tell you as soon as possible afterwards and show you the amount you’re still able to spend on your statements and on Internet Banking or Mobile Banking app immediately.

    A credit limit decrease can impact your overall available credit, which could negatively impact your credit score.

Key points on credit limits

  • Your credit limit is the maximum, in total, you can borrow on your credit card at any one time.
  • Your credit limit is usually based on your credit score and individual circumstances.
  • Just like your credit score, it can go up or down over time.
  • Try not to go over it, or you might end up losing any introductory/promotional interest rates and offers you have.
  • Remember, it’s still up to you to only borrow what you can afford.

Where next?

Important legal information

Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065. Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278.