A credit limit, also known as a credit access line or credit line, is the maximum amount of dollars you can spend on your credit card before having to pay off some of the balance. Depending on the credit card and how financially stable you are, credit limits can range from a few hundred dollars to tens of thousands of dollars.
Being smart about how you use your credit card — and paying your bill on time and in full each month — can help increase your credit limit and may improve your credit score. However, on the other hand, a higher credit limit can lead to overspending.
It’s important to keep in mind the following considerations when it comes to how your credit limit affects your credit score, how to ask for an increase and questions to ask yourself before doing so.
If you are unable to meet multiple credit card payments as your interest payments increase or if you simply want to move from a credit lifestyle to a savings lifestyle, it may be time to consolidate your credit card payments so you can erase your credit card debt. Debt consolidation means to bring all of your balances to a single bill and it can be a useful way to manage your debt.