High Limit Credit Cards

The average credit card limit (as of December 2016) is $8,071, according to Experian, although some credit card users have a much smaller limit, perhaps only $1,000 or $2,000.

A high-limit credit card is one with a credit line greater than $5,000. Because of the higher limit, these credit cards can serve as a backup emergency source for home improvements, auto repairs, and other unexpected expenses.

But although a high-limit credit card has its advantages, these cards can also be dangerous. Before you apply for one, consider whether you’re a good candidate for a high-limit card, and make sure you understand how to manage these cards responsibly.

Discover the Best Credit Cards

Should You Get a High-Limit Credit Card?

When applying for a credit card, it’s not uncommon for a credit card company to issue a card with a low limit, and then gradually increase your limit incrementally. This is typically the scenario when getting a first credit card to build credit, and then proving your creditworthiness over the years. But there’s also the option of applying for a credit card with a high initial limit.

Also, if you currently have a lower limit credit card, you can ask your credit card issuer to increase your limit. But just because high-limit credit cards are available and offered by banks doesn’t mean that you should apply for one. A self-evaluation can help determine whether you’re the right candidate for these cards.

Typically, high-limit credit cards are reserved for high-income earners. The higher your credit limit, the higher the amount you can potentially charge on the card. Therefore, make sure you have enough income to afford higher minimum payments.

Pros and Cons of a High Limit Credit Card

  • Enjoy greater spending ability. Even though a credit card should never take the place of an emergency savings account, a high-limit credit card comes in handy when you need immediate cash and you don’t have enough in savings. Rather than request a bank loan and complete an application process, use your credit card for the emergency. While this is an option, only use a credit card when you have a plan to pay off what you charge. Ideally, you should pay off charges within a few months.
  • Lowers your credit utilization ratio. A high-limit credit card can also help lower your credit utilization ratio. Credit utilization is the percentage of your total credit card debt compared to your total credit limit. The more debt you have, the higher this ratio. And since the amount you owe makes up 30% of your credit score, too much credit card debt can reduce your score. Getting a high-limit credit card and only charging a small amount to this card helps widen the gap between your total credit limits and your total amounts owed, which can lower your total utilization ratio and help raise your personal score.
  • Risk of higher balances. There’s the risk of credit damage if you ring up a high-limit credit card and can’t keep up with your minimum payments. This can destroy the relationship you have with your credit card issuer, and if your credit score drops, it can become harder to get future credit. Keep an eye on how much you’re charging throughout the month to ensure you don’t get into too much debt.
  • Requires good credit. High-limit credit cards are not available to everyone. Because these credit cards pose a greater risk for credit card issuers, many credit card companies require a good or excellent credit score for the highest limits. This is a credit score of 740 or higher. To know where you stand credit-wise, order a copy of your credit report and your credit score, and then assess whether you’re likely to get approved for a high-limit credit card. If you currently have a credit card and you’re interested in asking your credit card issuer for a credit limit increase, a good credit history increases the likelihood of your credit card company granting this request. Unfortunately, many credit card companies will not grant you a high-limit credit card if you have bad credit.
  • Higher interest charges. Credit card interest increases the final cost of goods purchased with a credit card. To keep your expense low, shop around and look for a high-limit credit card with a competitive rate. But even if you score a lower rate, you could potentially pay hundreds or thousands in interest if you carry balances from month-to-month. Avoid interest by paying off balances in full during your grace period, which is the period after the end of your billing cycle but before your minimum payment is the date.

Too much temptation. Before getting a high-limit credit card, consider whether you have enough self-control to avoid excess spending. With a higher amount of credit available, it might be tempting to splurge and purchase things that you can’t afford. As a rule of thumb, only use a credit card when you have cash available to pay off a charge.

Tips on Using High Limit Credit Cards

Here are a few tips for success when using a high-limit credit card

  • Pay off the card every month. In addition to minimizing the amount you charge to a credit card, make sure you’re committed to paying off your balances each month. Carefully monitor your balance during the month by signing up for online account management. Not only should you pay off the card each month, you should pay your statement balance on or before the due date to avoid late fees and possible credit damage.
  • Don’t let the card out of your sight. If you get a high-limit credit card, don’t let the credit card out of your sight. With a higher credit line, someone could steal your card and go on a major shopping spree. You’re not liable for fraudulent purchases, but there’s still the hassle of canceling your credit card and working with your credit card company to get fraudulent charges from your account.
  • Shop for a lower rate. Credit card interest rates vary, and your particular rate is based on your credit score. No matter your credit range, shop around and compare interest rates and annual fees to avoid paying too much for the privilege of using a credit card.

Types of High-Limit Credit Cards

No two high-limit credit cards are the same, so there are plenty of options based on what you’re looking for and your personal needs. For example:

  1. Gold, Platinum and Black Cards

After you’ve had a credit card for a while, there’s the opportunity to apply for a gold, a platinum or a black card based on your credit and how much you spend with the credit card annually. These are elite credit cards not available to everyone, and they usually offer the highest credit limits.

Sometimes, credit card companies invite cardholders to apply for a gold, platinum or black card. If you’re eligible, these cards generally earn a higher value of reward points and offer low introductory rates and other exclusive features like concierge services and bonus travel perks. Keep in mind, these credit cards may require a higher income and a higher credit score. In addition, annual fees with these cards tend to be higher.

Gold, platinum and black cards vary depending on the brand, so it’s important to familiarize yourself with different cards before applying for one. This is the only way to understand what you’re getting. For example, the Centurion card by American Express (the Black Card) is an invitation-only credit card for people who charge at least $250,000 on their personal American Express a year. There’s a $5,000 initiation fee and a $2,500 annual fee.

But you don’t have to spend this much to gain access to a black card. Another option is the MasterCard Black credit card. This is also a luxury credit card, but it only has an annual fee of $495.

  1. Non-Luxury High-Limit Credit Cards

You don’t have to apply for a luxury credit card to enjoy a higher limit. Several non-exclusive credit cards offer credit limits up to tens of thousands of dollars. Based on your credit history and income, you may qualify for one of the following:

  • Chase Sapphire Preferred
  • Barclaycard Arrival Plus World Elite MasterCard
  • Bank of America Cash Rewards
  • Capital One Venture Rewards
  • Discover It
  • Chase Freedom Unlimited
  • Discover It for Students
  • Capital One QuicksilverOne Cash Rewards
  1. High-Limit Charge Cards

Some people use the words “charge card” and “credit card” interchangeably, but there are differences between the two. Both allow you to buy now and pay later. But whereas a credit card has a credit limit, a charge card doesn’t have a preset spending limit. Instead, you must pay off a charge card in full every month. Because of this freedom, you need excellent credit and sufficient income to qualify.

  1. High Limit Balance Transfer Credit Cards

If you have multiple credit cards and you’re looking to consolidate all balances onto a single card, look for a high-limit balance transfer credit card. A balance transfer can simplify your credit card debt because you only have to manage one monthly payment. Search for balance transfer credit cards offering 0% interest for a limited number of months. Compare regular APRs too, in case you’re unable to pay off the balance in full by the end of your introductory rate period. Some credit cards charge a balance transfer fee up to 3%, but some cards will waive this fee.

  1. Corporate and Business Credit Cards

Do you own a business? You might be happy to know that some corporate or business credit cards include much higher limits than personal credit cards. A higher limit can provide much-needed working capital for supplies, equipment, advertising, etc. But even if you qualify for a higher credit limit, keep a close watch on spending and commit to paying off balances in full.

Questions to Ask Yourself…

  • What are your spending habits? When choosing a high-limit credit card, consider your spending habits. In other words, how much do you typically put on a credit card each month? This can help you decide whether a high-limit credit card makes sense for your situation. This type of card is beneficial if you prefer using a credit card for all of your purchases throughout the month. If your monthly purchases come close or nearly exceed your credit limit, getting a credit card with a higher limit can provide a little wiggle room and reduce the risk of exceeding your credit limit.
  • Does the card offer a rewards program? If you use your credit card frequently, compare different high-limit credit card reward programs to see which ones you can utilize. The more you spend, the easier it’ll be to earn points, miles or cash back on everyday purchases. Know the rules of a rewards program before applying for a card. Some rewards credit card have points or miles with expiration dates. Or if you’re eligible to redeem points for travel, you may encounter blackout dates, which are days you can’t redeem for airfare.
  • Are you eligible for a high limit credit card? Because high-limit credit cards generally require higher credit scores, contact different credit card companies (or read the fine print of the credit card application) to learn minimum credit score and income requirement for an approval.
  • Does the card offer sign-up bonuses? As you search for a high-limit credit card, look specifically for cards that advertise a sign-up bonus. If you’ll use the card often, you could potentially accumulate a large sum of points within a short span of time. This is usually how the promotion works: Spend a certain amount within the first 90 days of opening an account, and the credit card company rewards you with 30,000, 40,000 or 50,000 bonus points.


High-limit credit cards can be a good thing or a bad thing, depending on how you choose to manage your account. While these accounts are beneficial because of the higher spending ability, there’s also the risk of high debt and high-interest charges. So only apply for a high-limit credit card if you have enough self-control to keep manageable balances.
