Credit cards have a minimum credit limit, which is the lowest line of credit offered to an account holder.
The term minimum credit limit is often used in connection with credit card accounts. When a person is approved for a credit card, the card issuer usually applies a limit to the amount they can charge with the card. Often, however, a credit card company has a variety of credit limits that it will offer to cardholders, and the minimum credit limit is the lowest limit that it will offer to new credit card applicants. In most cases, individuals with the lowest credit scores receive credit limits closer to the minimum, while those with better credit scores may enjoy higher limits. While a person can start with the minimum credit limit, they may not necessarily maintain that limit for as long as they have the card; Credit card companies often offer credit limit increases.
An individual with a bad credit history is likely to receive a minimum credit limit.
In many cases, a person who wants to apply for a credit card considers the credit card company’s minimum and maximum credit limits. For example, a credit card company may advertise a minimum credit limit of $300 US dollars (USD) and a maximum credit limit of $3,000 USD. This basically means that a person approved to get a credit card from this company will have a credit limit of at least $300 USD, but no more than $3,000 USD.
The minimum credit limit is the lowest line of credit that a card company offers applicants.
Credit card applicants typically have no way of knowing what their credit limits will be before applying for a credit card. Most credit card companies decide how much credit they will provide after checking the applicant’s credit score. A credit card company typically uses the applicant’s credit score, as well as other information provided by the applicant, to decide whether the applicant poses a high or low loan risk. An individual with a bad credit history is typically high risk and will likely receive a limit close to the company minimum. On the other hand, a person with a high credit score is likely to receive the maximum credit limit, or close to it.
Most credit card companies provide opportunities for credit card holders to increase their credit limits. Even a person starting with the lowest credit limit can enjoy an automatic credit limit increase after proving they are responsible for making the payments on time. Others may call credit card companies to request increases after holding payments for a significant period of time.