Credit Rating, Credit Limit and Credit Repair Guide

Sometimes it is necessary to increase your credit limit to allow for more available funds when needed.

Most people increase their credit card limit before they go overseas on a holiday. Some people also like to increase their credit limit to pay for large expenses if they use a rewards credit card for example. By using their card to make these payments they will garner more awards points. It certainly helps to pay attention to these things if you want to take advantage of special offers.

Choose a responsible credit limit for your credit card

Choosing a credit card

Depending on the credit card that you will apply for, there will already be a certain limit of what you will be able to have. Low interest rate cards, with no frills have lower credit limits, which will be up to maybe $5000. Now there are credit cards at the other end of the market. Platinum credit cards will higher credit limits starting at $10,000 and go up to around $100,000. If you don't need a credit limit between $10,000 - $100,000, don't apply for those cards. Start with the low interest rate cards with no frills. Just because you pick a platinum credit card, it doesn't automatically mean that you will receive a high credit limit.

Comparing credit cards

Rates last updated October 17th, 2017
Name Product Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee Product Description
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
20.74% p.a.
0% p.a. for 18 months
$129 p.a.
Earn 3 bonus Velocity Points per $1 for the first 3 months, a first year annual fee refund and a yearly $129 Virgin Australia Gift Voucher.
HSBC Platinum Credit Card
19.99% p.a.
0% p.a. for 22 months with 2% balance transfer fee
$99 p.a.
Earn 1 Reward Point per $1 of eligible spend and receive complimentary travel and purchase protection insurances.
ANZ First Visa Credit Card
19.74% p.a.
0% p.a. for 16 months with 2% balance transfer fee
$30 p.a.
Get up to 44 interest-free days on purchases and take advantage of a low minimum credit limit.
Citi Rewards Platinum Credit Card
20.99% p.a.
0% p.a. for 24 months with 1.5% balance transfer fee
$49 p.a. annual fee for the first year ($149 p.a. thereafter)
An introductory rate on balance transfers with a rewards program offer.
Citi Simplicity Card
19.99% p.a.
0% p.a. for 15 months with 1.5% balance transfer fee
$0 p.a.
Earn 5% cashback on eligible purchases (capped at $50 per month) for the first 90 days from card approval.
Westpac Low Rate Card - Online Only Balance Transfer Offer
13.49% p.a.
0% p.a. for 24 months with 2% balance transfer fee
$59 p.a.
A low rate balance transfer to consolidate your credit card debt.
HSBC Platinum Qantas Credit Card
19.99% p.a.
0% p.a. for 6 months
$199 p.a.
Receive 60,000 bonus Qantas Points when you meet the spend requirement and earn up to 1 Qantas Point per $1 spent.
ANZ Platinum Credit Card - Exclusive Offer
0% p.a. for 3 months (reverts to 19.74% p.a.)
0% p.a. for 12 months
$0 p.a. annual fee for the first year ($87 p.a. thereafter)
Exclusive to finder, receive 0% p.a. interest on purchases for 3 months and 0% p.a. on balance transfers for 12 months with no balance transfer fee.
ME frank Credit Card
11.99% p.a.
$0 p.a.
Available in black or white, this no-fuss credit card offers the same rate on purchases and cash advances, plus card lock technology.
NAB Low Fee Card
19.74% p.a.
0% p.a. for 16 months with 2% balance transfer fee
$30 p.a.
Receive complimentary purchase protection insurance, special offers from Visa Entertainment and up to 44 days interest-free on purchases.
St.George Vertigo Platinum
12.74% p.a.
0% p.a. for 24 months with 2% balance transfer fee
$99 p.a.
Offers complimentary travel insurance, complimentary purchase insurance and access to a 24/7 personal concierge service.
St.George Vertigo Visa
13.24% p.a.
0% p.a. for 18 months with 2% balance transfer fee
$55 p.a.
Receive up to 55 days interest-free on purchases and the ability to make contactless payments with Visa payWave technology.
ANZ Frequent Flyer Black
19.99% p.a.
$0 p.a. annual fee for the first year ($425 p.a. thereafter)
Receive 75,000 bonus Qantas Points when you apply online, are approved and spend $2,500 on eligible purchases in the first 3 months.
Westpac Lite Card
9.90% p.a.
$108 p.a.
Keep credit card costs low with a maximum credit limit of $4,000 and no foreign transaction fees.
NAB Low Rate Platinum Card
13.99% p.a.
0% p.a. for 16 months with 2% balance transfer fee
$100 p.a.
Enjoy the protection of 7 complimentary insurances including overseas travel and purchase protection insurance.
NAB Rewards Platinum Card
19.99% p.a.
0% p.a. for 6 months
$195 p.a.
Collect 60,000 bonus points when you spend $2,500 on everyday purchases within 60 days of account opening.
NAB Low Rate Credit Card
13.99% p.a.
0% p.a. for 16 months with 2% balance transfer fee
$59 p.a.
Receive up to 55 days interest-free on purchases, special offers from Visa Entertainment and Tap and Pay capabilities.
American Express Essential®  Credit Card
14.99% p.a.
0% p.a. for 12 months with 3% balance transfer fee
$0 p.a.
Receive a $50 credit when you apply online, are approved and spend $750 on your new card within the first 3 months of card membership.
Qantas American Express Premium Card
20.74% p.a.
0% p.a. for 12 months with 1% balance transfer fee
$249 p.a.
Enjoy two complimentary Qantas Club lounge invitations per year, plus the protection of complimentary travel and purchase insurance.
American Express Velocity Escape Card
20.74% p.a.
0% p.a. for 12 months with 1% balance transfer fee
$0 p.a.
Earn uncapped Velocity points on purchases and redeem for a range of rewards including flights, accommodation, car hire and gift cards.
Bank of Melbourne Amplify Platinum
19.49% p.a.
$99 p.a.
Earn 1 Amplify Rewards Point per $1 spent and receive complimentary travel insurance and purchase protection.
NAB Rewards Classic Card
19.99% p.a.
0% p.a. for 6 months
$95 p.a.
Earn 0.75 NAB Rewards Points per $1 spent and receive complimentary purchase protection insurance.

Compare up to 4 providers

Compare more credit cards here

How to decide on a credit limit

credit card limit decideCredit card companies are going to ask for your income and requested credit limit. It's important to choose a responsible credit limit for your credit card. You don't want something that is too high, where you are going to max it out and then not be able to pay it off. Credit histories are always looked at for other things such as mortgage requests, car loans and sometimes employment.

When thinking about a credit limit, it is a general recommendation to get at most 50% of your monthly income. But it is even better if you can get 30%. Therefore, if you make a monthly income of $5000, then you should request between $1500 and $2500. If you know you are going to pay it off every month, then you can get the higher credit limit. But if you have trouble with spending, then you should stick to the lower credit limit.

The only exception to this is if you are trying to max out some reward credit cards to get frequent flyer miles or reward points. If that is the case, get a higher limit but only if you are going to pay it off each month.

One thing to remember when deciding on your credit limit, is that it won't be able to change for at least six months. Even then you will have to request either an increase or decrease. Credit card companies are not allowed to increase your limit without your permission anymore. Keep that in mind so you're not regretting your decision within the first month.

Credit card company's decision

As mentioned above, the credit card company will have the final say on your credit limit. It will most likely be based on credit history and income. If you have a good habit of paying off your balance each month, then you will be more likely to get a higher credit limit. But you ultimately give them a starting base for them to decide.

When trying to decide on a responsible credit limit for your credit card look at the different credit cards and what type of limits they offer. Then think about your situation and request between 30%-50% of your monthly income. Remember, how you handle your spending and your credit history will impact other important financial decisions. The credit card company will ultimately have the last say on what your credit limit is but it is up to you to keep spending responsibly. You should pick a reasonable limit and stick with it.

Clean your credit file

How to increase your credit limit

Your credit limit can be increased by calling your bank or visiting your local branch. Usually this is pretty much instant or else your increased limit will start to take effect once you last credit card bill has been paid off. Before you ask for a higher limit make sure you do the following first:

  • Be loyal to your bank

    They trust a long-term customer more than people who have no financial track record, but if there are better deals around, don't be scared to switch.

  • Keep paying those annual card fees

    This will establish trust between you and the credit card provider.

  • Pay off your credit card debt in full each months

    The easiest way to do this is by setting up a direct debit from your savings account. If you do, make sure you check your credit card statements thoroughly to spot any discrepancies. If you don't, then your financial details might be abused by cyber thieves without your knowledge.

  • Pay attention to the offers coming through your mailbox

    Some credit card companies will mail you appropriate offers from time to time. Know they don't do this willy-nilly. They usually have access to a large database of financial information about you and wouldn't offer you a new card unless they know you are suited to the offer.

  • Credit utilisation has a big impact on your file

    You never want to use all of the credit available to you, lenders look negatively on that. Using less than 25% of your available credit limit is favourable, while using more than 80% negatively affects your credit file and borrowing power. Fortunately, a high credit utilisation will not hurt your credit rating forever. When you reduce your balances, or have the limits increased, your utilisation will decrease and your file will go up.

How to increase your credit limit after having your credit file repaired

Some consumers find themselves unfortunate enough to run into financial troubles at some stage in their lives. If that happens to you, not all is lost as long as you work with your lenders. If you show a genuine interest in wanting to repair your credit, then chances are that by following the above steps you too can increase your credit card limit eventually.
About credit rating

If you are having difficulties in obtaining credit, you might want to find out how a credit repair service can help remove the defaults on your credit file. Learn more about credit card repair service.

With the right knowledge and your own willingness to better your situation it is possible to increase your credit limit after doing credit repair on your credit file.

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2 Responses

  1. Default Gravatar
    September 13, 2016

    Quoting from the guide: “Using less than 25% of your available credit limit is favourable, while using more than 80% negatively affects your credit file and borrowing power”

    What exactly defines utilisation? If for example, I spend 81% of my credit limit, but then pay that off before the due date, does that count as credit utilisation? Or is it only if a balance is carried each month that the credit is actually being utilised?

    • Staff
      DebbieSeptember 21, 2016Staff

      Hi Brendan,

      Thanks for your question.

      To exactly define credit utilisation, it is the percentage of your credit card balance versus your credit limits. For example, you have a balance of $5,000 and your credit limit is $25,000, then your credit utilisation is 20% (balance/credit limit*100). If you spend 81% of your credit limit, you need to pay the balance before due date or make it lower and achieve at least 25% credit utilisation rate before statement closing date so your credit report won’t be affected.

      I hope this helps.

      Cheers,
      Debbie

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