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For a number of reasons, I recently asked my credit card company for a credit limit increase. I was hoping they'd propose a new limit to me, but they instead the reverse happened: they asked how much I wanted. I decided to play it conservative; the new limit puts me at under 50 percent peak utilization, but I suspect I could have asked for more and gotten it.

So now I'm looking for data relevant to that problem. I hear stories of people who rack up tens of thousands of dollars in credit card debt, way above my current credit limit. But they could just be racking up over the limit fees and interest. What I suppose I really care about is the average credit limit in the US. To eliminate some outliers and keep the question broadly relevant, what I really want to know is: what's the optimal available credit for the median income household in the US?

  • A bit of background: before I financed my car in 2009, I had a score of around 800. I assume the limit took a hit, so I may be hovering around the cutoff for best rates (I'll probably check my FICO again pretty soon). Savings are great (I have them), but I'm just looking out for small FICO boosts on the large purchases I can't save up for. – jldugger Feb 17 '11 at 14:49
  • I travel for my job often times several times a month for no less than a week at a time. I don't use a company credit card and often times rack up expenses of between $3,500 and $6,000 a month on business travel. Often times I don't keep enough money in my checking account to float that type of money on a monthly basis and still have enough money for all my other bills (mortgage, insurance, gas, food, spending money etc). All of my business expenses are reimbursed so I never miss a monthly payment on my credit card. And while I often times get close to my credit limit at the end of every month – user10811 Aug 1 '13 at 22:18
  • I have about 45G+ of open credit available (3 cards) combined, but I pay my debt every month. I have more credit than my hubby, and he makes more than me. I like knowning that it's there for just in case. I once owed 8G+ in CC debt many years ago and it was stressful. Never again. – user30835 Aug 2 '15 at 11:35
  • Also, I had a BOA card with a 1G limit, I purchased a high ticket item that was around 8 hundred and my FICO score got HIT!! Even though I have all this open and available credit, they looked at it as though I had "maxed out" a card, which set them on high alert. I was furious, I did not realize that they were looking at individual cards, I thought FICO was looking at the big picture. Another "never again" – user30835 Aug 2 '15 at 11:40
  • @Haggis Yeah, I've had the same experience--they see high utilization on any card as a bad thing even when it's a very low percentage of your total credit. Pay it off and your credit rating goes back to normal, though. What's even crazier is at least the FAKO scores using integer math--less than 1% total utilization taking the ding for no credit being used. – Loren Pechtel Aug 3 '15 at 2:21
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Well, I did a bit more research, and one site breaks down limit by score, which I suppose is one way I can compare where I'm at to people like me.

enter image description here

Edit: Credit limits have been lowering over time. The chart above is from 2011, now in 2015:

enter image description here

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    Those limits seem really low. – duffbeer703 Feb 27 '11 at 1:36
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    I wonder if it's the average credit limit per revolving account? – jldugger Feb 27 '11 at 21:13
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    Nice graphic, I like Credit Karma and the folk that work there. The limits look like "per account" as a higher scoring person would have total access far higher than these numbers. – JoeTaxpayer Sep 14 '12 at 15:33
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Without wishing to impose my own agenda, I think you are asking the wrong question. The question should be "how much credit do I need". What the average household has is utterly irrelevant, unless you are engaged in some bizarre competition with an imaginary household over who can get the most credit.

If you have enough of a credit limit so you almost never get close it then that sounds like enough to me. Some people use credit cards as their "emergency funds", but that is not good practice - there are almost always cheaper ways of getting money than a credit card, and emergencies are almost never so urgent that you absolutely need the instant access of a credit card rather than the couple of days needed to set up an unsecured loan.

There are downsides to having too high a credit limit. If someone steals your credit card they can rack up a bigger debt for you. And the reason why credit card companies like to give you big limits is they hope you will be tempted to use them, which means big profits for them. You want to avoid that.

  • "What's the average" is useful in estimating what you might reasonably be able to get. Beyond that, yeah, I suppose it might be emotionally satisfying to say "Hey, I qualify for over twice as much credit as the average person!", but then what? As they say, with that and two singles you can buy a $2 cup of coffee. – Jay Aug 3 '15 at 18:37
  • I agree. If OP regularly goes over 25% utilization, but pays in full on a monthly basis, it might be worthwhile to increase the card limit in order to keep in the low utilization category. However, his stated FICO is in the 800 range, so all of this speculation is meaningless. He has sterling credit. Tracking score might be an interesting hobby, and useful for preventing identity theft, but he does not need to worry about building credit. – Xalorous Oct 19 '16 at 19:28
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The optimal credit limit is not having to rely on credit (hey, you didn't define what optimal meant :P). That said, if you're in a position to name your price, make sure you have enough to bail you out of a tight spot; sure, you might end up with credit card payments if crap hits the fan, but at least you can get yourself through it. Yes, it's nice to have a limit that will prevent you from getting deep into debt, but if you're asking this question, you're probably already responsible enough to not spent beyond your means.

FD: I've never gone more than 20% into my current credit limit; on the other hand, I have enough savings to back it up if I were to get run into trouble one day. My goal is to make sure that when something really bad happens, I know I have a financial source to keep the power on if need be, even though it's a temporary resource.

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Zero? Seriously, if you want to have a credit card for whatever reason and pay it off every month, I'd look at how much I'd use and make sure I stay under 50% utilisation. I don't think there is an 'optimal available credit' as it is too dependent on individual circumstances.

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RE "what's the optimal credit limit": I think that depends a lot on your personality, money management habits, and self control.

If you are ever tempted to run up debts that will be difficult for you to repay, you are better off having a limit that will impose an artificial restraint on you. Some people get big credit limits and go on foolish shopping sprees. Like I saw a cartoon once where someone lists his unused credit as an "asset". If that describes you, then you want a credit limit that is low enough that if you use it all, you can still comfortably pay it back. Maybe one month's pay, something on that order.

If you do not have any such problem, if your psychology is such that you can have a credit limit of a hundred thousand dollars but you don't even think about this when you go to the store, you think only about how much you have in the bank, then presumably the ideal credit limit is as much as anyone is willing to give you. Then it would be there for emergencies, but you could simply not use otherwise.

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The optimal available credit is as much as you can get as far as FICO scores are concerned. If you only have a small amount of credit you ideally want to keep your usage of any one card and total usage at less than ~20% of your credit limit(s). Anything beyond that and there is little value in larger credit lines unless you are doing an AOR or some similar credit related games.

  • Can you define AOR? I'm not familiar with that acronym. – Pete Aug 24 '11 at 16:52
  • @Pete An AOR is an App-O-Ramma. It was a common technique during the credit boom where you put in a large numbers credit card applications in a short period of time targeting cards with 0% balance transfer offers. You take out as much money as you can through transfers and invest the money. – stoj Aug 25 '11 at 0:11
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Usually platinum cards start with limits around $5,000. Some banks in the past, particularly MBNA and Citibank had a practice of raising credit limits monthly or when you did balance transfers.

IMO, you should focus on maintaining your oldest accounts and paying on time. The rest is trivia.

  • Heard somewhere or other: My credit card company keeps raising my limit. But I continue to rise to the challenge. – Jay Aug 3 '15 at 18:39
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I pay the card in full each month. The largest bill I've gotten was about 1/2 month's income. the desire for low utilization and the way the cycle runs, you can charge for 25 days before prior bill is due, and I need a limit close to two months gross salary.

  • Joe, was that supposed to be a comment? – keshlam Aug 3 '15 at 13:02
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    Question title - "What's the average credit limit?" vs "what's the optimal available credit for the median income household in the US?" in the text. I answered the latter. – JoeTaxpayer Aug 3 '15 at 13:32

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