When applying for a credit card, it can be both exciting and stressful as you wait to learn your credit limit. Some issuers provide this information the instant you’re approved, while others opt to share your limit in the letter that includes your actual credit card.

There are two primary reasons why your credit limit is so important:

Your limit impacts your buying power
Your limit impacts your credit score, as 30 percent of your score is the ratio of your balance to your limit (known as credit utilization)

Details that Affect Your Credit Limit

In short, credit card issuers set limits as a means of mitigating risk. For example, an issuer won’t grant you a $50k credit limit if you only earn $25,000/year.

With all this in mind, let’s examine some of the details that affect your credit limit:

Your income. As noted above, your income can have a big impact on your credit limit. The higher your income the greater chance there is that you will be approved for a higher limit. Of course, since this is only one factor, a high income alone may not be enough to get you the limit you’re seeking.
Your credit history and score. Let’s face it: this comes into play with anything associated with a credit card or loan. If you have a good or excellent credit score, combined with a strong credit history, an issuer is more likely to trust you with a high limit.
Limits on any other credit cards. If you have another credit card, an issuer may take its limit into consideration when making a decision. Those who have proven the ability to spend responsibly with a high credit limit are more likely to receive a higher limit the next time around. Conversely, if your other cards have a lower limit, you may find that an issuer follows this trend.

Co-applicant. Are you applying jointly, such as with a spouse, for a credit card? If so, the issuer will consider both of your incomes and credit history. This can go a long way in helping you secure a higher credit limit.

The Type of Credit Card

Get this: even if all the details above work in your favor, you may still find it difficult to secure a high limit on a new credit card.

Depending on the offer, you may come to find that there is a predetermined credit limit or range.

For instance, when applying for a credit card you may find that the limit range spans from $5k to $15k. This means you won’t receive an initial limit of more than $15k, even if you have a high credit score, strong history, and robust income.

However, you do have the right to request a credit limit in the future. After proving that you’re a responsible consumer, such as over a period of six months, you can contact your issuer to request a higher limit.

Tip: some credit card companies review accounts regularly for limit increases.

Final Thoughts

When applying for a credit card, it’s important to understand how and why spending limits are set. With this knowledge, you should have a clear idea of what to look for and expect as you compare offers and apply for a card.