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Depending on the situation you’re in, reducing your credit card limit could either limit your spending power or help you take control of your finances. If you're unsure, this guide breaks down the potential positive and negative impacts of lowering your credit limit. You'll also discover the steps you need to reduce your credit limit and find a list of the contact details for the major credit card issuers in Australia.
Here are some of the pros and cons you should consider before you contact your credit card issuer to lower your credit limit.
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 balance. Instead, you can request a more reasonable credit limit that will prevent you from overspending and collecting a debt that you may struggle to repay. If you are having trouble clearing a large credit card debt that's collecting interest, you could consider transferring it to a card with 0% on balance transfers to pay it off interest-free for an introductory period.
If you're planning to apply for another line of credit (such as a credit card, loan or mortgage), reducing your credit limit could help you apply for a higher limit on your new product. This is because lenders consider your existing debt when assessing your application and determining your approved credit limit.
Lowering your credit limit can restrict your spending power, which could be inconvenient if you need to cover large purchases or emergency costs in the future. If you want to give yourself the option of a larger credit limit in the case of emergencies, you should stick to a monthly budget that you know you can repay in full each statement period. That way you'll have access to a higher credit limit if necessary, but can keep your regular costs under control.
In Australia, lowering your credit limit and your 'credit utilisation ratio' don't impact your credit score because your balances aren't recorded on your credit report.
If you've weighed up the pros and cons and decided to reduce your credit limit, these are the steps you can follow to get started:
You can use the contact details below to request a credit limit decrease:
| Bank | Phone number |
|---|---|
| American Express | Number on the back of your card. |
| ANZ | 13 22 73 |
| Bankwest | 13 17 19 |
| Bank of Melbourne | 13 22 66 |
| Bank of Queensland | 1300 557 272 |
| BankSA | 1300 784 934 |
| Citi | 13 24 84 |
| Commonwealth Bank | 13 22 21 |
| HSBC | 13 21 52 | 1300 301 168 (HSBC Premier) |
| Latitude Financial Services | 1300 552 079 |
| NAB | 13 22 65 |
| St.George | 1300 784 934 |
| Westpac | 1300 130 961 |
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 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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Hi ive been discharge from bankruptcy for 15 months now with a very low credit rating and would like to get a credit card. I’m trying to improve my credit rating. Is there a bank or non bank institution that will do this? Kind regards
Hi T Kim,
Thanks for getting in touch!
I’m afraid Australian banks would require a good credit score to apply for a credit card. You may need to work on improving your credit score before you apply for a new card. You can request a free copy of your credit score through Finder and check out our guide to credit repair for more tips. If you do apply for a credit card before you’re ready and are rejected, this will only further hurt your credit score.
You can check what credit products are available to bad credit applicants to know your options.
Hope this helps!
Best,
Nikki
I have just checked up on my credit score and I find that I am a bankrupt which is incorrect
is it possible for me to find out who made me bankrupt ?? Many Thanks.
Hi William,
Thank you for visiting Finder.
You can request for your credit file using a valid Australian driver’s license. Once done, you may then refer to our guide on how to identify incorrect listings. If there are any, follow the instructions on how to remove the wrong information from credit report.
I hope this helps.
Let us know if there is anything else that we may assist you with.
Cheers,
Ash
If my credit card is already at the minimum 6000 product limit is there any way to lower it or should I transfer to another card that has a lower product limit if I’m wanting to lower the limit as I pay it off?
Hi Rachel,
Thanks for your inquiry.
Unless you agree to receive credit limit increase invitations, the power to raise or lower your credit limit is up to you. 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.
You may follow these 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
Hope this information helped.
Best regards,
Rench
Does it increase my credit score on websites like GetCreditScore 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?
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.
You may refer to our guide on ways to improve credit scores and know what to avoid when improving your credit score.
I hope this helps.
Cheers,
Sally
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
Hi Phil,
Please contact your financial institution by phone or in person.
Cheers.
Jeremy