What is a credit limit?

Written byEmily Tye

Updated:Mar 12, 2026

5 min read

• A credit limit is the maximum amount you can borrow on a credit card.

• It is set by your credit card provider and can change over time.

• A higher credit score can lead to higher credit limits.

• Your credit limit is the total amount you can spend, not a target. 

• To demonstrate responsible borrowing to lenders you should aim to use less than 25% of your total limit. 

How does a credit limit work?

When you apply for a credit card, the lender (your bank or credit card provider) will assess your financial situation. This can include your credit history, credit score, income, and in some cases, your spending habits.

If your lender sets a £1,000 credit limit, this means they are willing to let you spend up to £1,000 on your credit card at any given time.

What is available credit?

Your available credit is your total credit limit minus the total amount you have spent. 

For example, if your credit limit is £1,000 and you have spent £200, your available credit drops to £800. Once you pay back the money you have spent, your available credit rises again.

What happens if I spend more than my credit limit?

This can vary depending on your credit card issuer, but these are the most common scenarios you’ll find in the UK:

1. Your card is declined

If you try to make a purchase that pushes your total balance above your credit limit, your transaction will likely be declined at the point of checkout. While this may be embarrassing in the moment, it’s actually designed to protect you from accidentally incurring fees or borrowing more than you can afford.

This is what will happen if you have a Zable card.

2. You’re charged a fee

Some card providers will allow the transaction to go through, but will charge something called an ‘overlimit’ fee, often capped at £12.

3. You lose a promotional rate

If you are currently within a 0% interest promotional offer, you may breach the T&Cs by going over your limit. This could end the 0% period, meaning your standard APR rate would kick in.

4. Your credit score drops

The UK's main Credit Reference Agencies (Experian, Equifax, and TransUnion) track your credit utilisation (how much of your limit you are using). Ideally, you’ll use 25% or less to demonstrate responsible borrowing, so if you hit 100% or more, it can leave a negative marker on your credit file.

5. Your account is frozen

If you’re consistently maxing out your credit card or trying to go over your limit, your card provider may take this as a sign of financial struggle and freeze your account to stop you getting into more debt. This protects both them and you. They may also choose to go down other avenues, such as lowering your credit limit.

How is my credit limit determined?

Your credit limit is based on what the credit card provider believes you can comfortably afford to repay. As well as looking at your income, they will look at your credit file and check your credit score.

Checking your credit file will let the provider see if you have a history of paying bills on time, or whether you have any missed payments, defaults of CCJs (County Court Judgements). It also reflects things like the length of your credit history and how much of your credit you use. This all helps to paint a picture of your reliability and how 'risky' it is to lend to you. Typically, the higher the perceived risk, the lower the credit limit.

A few lenders (Zable included!) understand that your credit score may speak to how you borrowed money in the past, but that may not be totally reflective of how you manage money today. With this in mind, they'll also look at your income vs your spending habits.

What is a good credit limit in the UK?

In general, ‘good’ credit limits in the UK may range from £3,000-£4,000. 

But remember, a larger credit limit isn’t always better. It’s based on what you can afford to reliably repay, and should be personalised accordingly.

You may also look at it in another way. A good credit limit may simply be one that is large enough to keep your credit utilisation ratio low. As we touched on earlier, you ideally want to use no more than 25% of your available credit at any given time to keep your credit score in top shape.

Therefore, you can calculate your own ‘good’ limit based on your normal monthly spending:

If you typically spend £250 a month on your credit card and pay it off, a good credit limit for you would be £1,000.

What is the minimum credit limit on a credit card?

In the UK, the minimum credit limit you can generally get on a credit card is £50. This credit limit is designed for people who want to rebuild their credit score after financial struggles. 

The idea is to start small, and then gradually increase your limit as you demonstrate responsible borrowing. If you buy even one small thing a month (like a £12.99 Netflix subscription) and pay it off immediately, it registers as a positive mark on your credit file, slowly rebuilding your score.

This is exactly what credit cards for bad credit are designed for.

How do I increase my credit limit?

At Zable, we automatically check whether you’re eligible for credit limit increases. 

With many providers, you can usually request a limit increase through online banking or their app. Your request will be assessed and either approved or declined. There are typically time stipulations in place. For example, waiting 4 months since your last increase, or having built up at least 3 months of payment history.

To improve your chances of having your request approved, it’s important to always pay your credit card bills on time, to give it time and avoid asking too often, and to use your card regularly (without going to close to your limit).

Does my credit score impact my credit limit?

Yes, absolutely. Your credit score is typically one of the most significant factors lenders use to determine your credit limit.

If you have a high credit score, it means you have a proven track record of paying your bills on time, keeping your overall debt low, and managing your accounts responsibly. Because lenders view you as a ‘low-risk’ borrower, they are much more willing to give you a higher credit limit. They trust you will pay the money back.

If your score is on the lower end, perhaps due to past missed payments, high existing debt, or simply because you are young or new to the UK and haven't built a credit history yet, lenders view you as a higher risk. To protect themselves, they will either decline your application or approve you for a low credit limit until you can prove your reliability.

How much of my credit limit should I use?

Credit Reference Agencies Equifax and Experian both suggest using 25% or less.

So if your credit limit is £1,000, you should aim to never have a balance higher than £250 at any given time.

This blog is for informational purposes only and does not constitute financial advice. Please speak to a qualified financial adviser before making financial decisions.