What is the average credit limit on a first credit card ? After going through the stress of getting approved for your first credit card, you become tired. However, you still need to know your average credit limit for this first card. In a lot of situations, it is usually low. This should not make you sad, it’s just normal to have a small credit limit for a start on your first credit.
The Average Credit Limit On a First Credit Card ; Why Will Your First Credit Limit Be Low?
You do not have a credit history which is one of the factors credit card issuers use to decide an applicant’s credit limit. It is only when you already have a positive credit history that you will have a better chance of getting approved for bigger credit limit. Since you have none, they do not know how responsibly you can manage credit. To avoid too much risk, they just permit you start with a small limit.
Also, this first credit limit can be very small especially if it is retail store credit card. It may be as low as $100. Visa or MasterCard can give you up to $300 or $500. If you already have a credit history with house or car loan and it is positive, you may get a first credit limit of up to $1,500
Managing a Low Credit Limit
Your first credit limit being low does not mean that it will always be low. Normally, starting small helps you learn how to manage credit gradually. It will save you from debt. When you avoid overspending and pay your balances in full monthly, you prove yourself to be responsible. This will help you qualify for credit limit increase. A lot of financial institutions increase your credit limit automatically after several months of timely payments. Others only increase your credit limit when you request for it.
How to Get a Bigger First Credit Limit
You can get a higher credit limit on your first credit card by applying jointly with anyone close to you who already has a positive credit history. It could be any of your parents, a spouse or friend.
Moreover, you can as well get a secured credit card . You only need to make a security deposit with the credit card company for the amount of credit you’d like. Your security deposit must be the same amount with their credit limit. When you maintain a positive credit history and score, your security deposit will be returned to you.
The Wells Fargo Secured Mastercard has a high credit limit. If you have up to $10,000 security deposit for a credit limit of the same amount. A higher credit limit for a start when managed properly helps you get approved for unsecured credit cards.
Getting a Credit Limit Increase
To get a credit limit increase, do the followings for at least for 12 months;
- Do not charge too much (less than 30% of your credit limit is best)
- Make your payments on time each month and pay fully.
- Avoid any delinquency.
When the financial institution discovers how responsible you are, it may just automatically increase your credit limit.
However, some financial institutions do not automatically raise it, you can request for a credit limit increase. You may do it through mail or contact your customer care service agent. After your request, they will review your account history and credit history, your current monthly income, and other debt obligations. If the factors are positive, they will approve your credit limit increase request.
In a situation that it is not approved, they will send a letter explaining why. Work on the information in the letter to improve your chances of getting a credit limit increase. You may request again after about 6 months.