Reducing Your Credit Limit: Is It A Good or Bad Idea?

How do I change my credit limit?

Depending on the situation you’re in, reducing your credit limit could either limit your spending power or help you take control of your finances. If you find yourself struggling to repay your balance each month and want to limit your temptation to spend, you can use this guide to find out how you can reduce your credit limit with most Australian credit card issuers.

Steps to reduce your credit limit

  1. Contact your bank provider (via phone or local branch).
  2. Request the credit limit decrease
  3. Your credit limit will be updated within 24-48 hours

How to reduce your credit limit

You can use the contact details below to request a credit limit decrease:

BankPhone number
American ExpressNumber on the back of your card.
ANZ13 22 73
Bankwest13 17 19
Bank of Melbourne13 22 66
Bank of Queensland1300 55 72 72
BankSA1300 784 934
Citi13 24 84
Commonwealth Bank13 22 21
HSBC132 1521300 301 168 (HSBC Premier)
Latitude Financial Services1300 552 079
NAB13 22 65
St.George1300 784 934
Westpac1300 130 961

Should I reduce my credit limit?

Unless you agree to receive credit limit increase invitations, the power to raise or lower your credit limit is up to you. If you’re unsure whether you should lower your credit limit, read on to learn some of the main reasons cardholders lower theirs:

  • Reduce your credit limit to pay off your credit card. If you’ve maxed out your credit card in the past or find it hard to stick to a budget, you can curb the temptation to spend by reducing your credit limit as you pay off your credit card.
  • Increase your borrowing power on other loans. Reducing your credit limit on one credit card could mean you’re eligible for a higher credit limit on another credit card or a mortgage. Consider where the higher credit limit will be more useful and base your decision on that.
  • Consider your planned purchases. If you’re considering lowering your credit limit, it’s also important to factor in whether you have any planned purchases coming up. Even if you want to lower your credit limit, you’ll want to make sure it doesn’t completely limit your spending power, especially if you use the card for emergencies or have a high-ticket purchase coming up.

Can I apply for a higher credit limit in the future?

Yes, you can but most Australian financial institutions limit you to one application for a credit limit increase every six months. Please note that you’ll need to go through a credit check each time you apply for a credit limit increase.

The other option is to complete and send in a credit limit increase/decrease application form. You can find this document on your credit card provider’s website.

Reducing your credit limit can be an alternative to cutting up the card. Keep in mind you can only apply for a credit limit increase every six months with most cards so make sure you don’t need the money before you make the call to lower your limit – it may be a while before you can raise your limit again.

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Sally McMullen

Sally McMullen is an editor at who is a credit cards, frequent flyer and travel money expert by day and music maven by night.

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4 Responses

  1. Default Gravatar
    PaulFebruary 17, 2016

    Does it increase my credit score on websites like to decrease my limit on my current cards?

    I read somewhere that they consider your current available credit limit when determining if you are able to get a new card and the more credit you can already access to worse off they rate you.

    Can you clarify?

    • Staff
      SallyFebruary 19, 2016Staff

      Hi Paul,

      Thanks for your question.

      The impact that decreasing or increasing your credit limit will have on your credit score will depend on your credit history and ability to repay.

      If you’re struggling to repay your balance, reducing your credit limit to curb your temptation to spend more could help. So long as you’re able to make timely repayments and demonstrate that you’re a low risk applicant, reducing your credit limit could help improve your score.

      For more tips on improving your credit score, please see our guide.

      I hope this has helped.



  2. Default Gravatar
    PhilFebruary 16, 2012

    Hi, How do I go about reducing my credit limit on current credit card? Have tried via websites but can’t find how !! Do I need to go into a Westpac branch? Comments appreciated. Thanks Phil

    • Staff
      JeremyMarch 2, 2012Staff

      Hi Phil,

      Please contact your financial institution by phone or in person.


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