What’s the average credit limit on your first credit card?
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If you’ve never had a credit card before, you’re probably wondering what your credit limit will be after you approve your first one.
Your credit limit is an important factor with any new card. It represents the maximum amount of credit you have available. When you are approved for a credit card, lenders determine your credit limit based on the information in your application and your credit report. But some types of credit cards are known to have lower credit limits than others.
Below, Select describes the average credit limit you can expect on your first credit card and how you can possibly increase that limit.
Average credit limits
Data from the Equifax credit bureau’s “Credit Trends” report shows that the average credit limit for new “bank card issues” (all new account openings) was between $ 5,000 and $ 6,000 in 2018 and 2019 .
“However, many consumers new to credit start with a private label credit card, such as a retail store credit card,” an Equifax spokesperson told Select. “These starting limits have averaged between $ 2,000 and $ 2,500 over that same period.”
Since many consumers apply for store cards as their first credit card, your first credit limit will usually be low. While Equifax notes that these retail cards cost an average of between $ 2,000 and $ 2,500, credit limits can be much lower than that, in some cases less than $ 1,000.
“The limits on these cards are noticeably low,” financial expert John Ulzheimer, formerly of FICO and Equifax, told Select. “And if your first card is a secure card, the limit will probably be very low as well.”
Secured credit cards are typically marketed to people with very little credit history because they require you to make an initial security deposit (usually around $ 200) which is your credit limit. This means your limit won’t be that high, but it’s a great way to start building credit. Some of the best secured cards include the Capital One® Secured for a low deposit requirement and the Citi® Secured Mastercard® for a low interest from a large bank.
How to increase the limit on your first credit card
At the end of the line
Credit limits vary and are set by lenders based on a handful of factors, such as your ability to pay your debt, your salary, your credit rating, and your credit risk. The good news is that once you start building credit, you’ll have a better chance of getting a bigger line of credit.
If you already have a good mix of credit products, like a mortgage or loans in your name, you will also have a greater likelihood of receiving a higher credit limit on your first credit card compared to someone completely new. in credit.
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Information about Capital One® Secured was independently collected by Select and has not been reviewed or provided by the card issuer prior to posting.
Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.