What is the average credit limit for Americans?

The average credit limit for Americans may vary more than you think, and that’s especially true when you separate the population by age. Note that the average credit limit tends to be higher for consumers with high incomes and excellent credit, but that other factors, like your current credit utilization, can play a role as well.

What is considered a “normal” credit limit among most Americans?

The average American had access to $29,855 in credit across all of their credit cards as of the third quarter of 2023, according to Experian. But the average credit card balance was $6,501 during the same quarter— well below the average credit limit.

The average credit limit increased 6.8 percent compared with the third quarter of 2022, when the average credit limit across all consumers came in at $27,955.

However, there are huge disparities within available credit limits across age groups, which can mostly be explained by the amount of time generations have had access to credit. There are also disparities among available credit limits by state of residence.

Average American credit limit by age group

Experian data suggests that a longer credit history generally leads to having more access to credit, presumably based on higher scores that result from having more credit history. Here’s how Experian breaks down the data on average credit limits based on generation, with comparisons across Q3 of both 2022 and 2023.

So, why do older generations tend to have higher credit limits than younger generations? The explanation boils down to two words: life experience.

For one thing, the FICO credit-scoring model assigns a 15 percent value to length of credit history. So, the older you are, the longer your credit history likely is. In addition, older generations have enjoyed more time to build a solid payment history. At 35 percent, payment history is the single biggest FICO scoring factor.

Average credit limit by state

While where you live doesn’t directly affect your credit limit, factors unique to your state may influence your credit limit. For instance, cost of living, average salaries and tax rates can impact the overall economic stability of a state’s residents. This, in turn, can affect how high or low the average credit limit is in a given state.

Eight of the top 10 states for the highest average credit limit in 2019 were on the East Coast. Of these eight states, half rank among the top 10 states for the highest cost of living.

States with the highest total credit limits

The following chart, based on Experian data from the second quarter of 2019, shows the top 10 states for average total credit limit and average FICO score.

States with the lowest total credit limits

Unlike the 10 states with the highest total credit limits, the 10 states with the lowest credit limits tend to be among those with the lowest cost of living, according to a recent survey. Seven of the bottom 10 states are in the South, according to an Encyclopaedia Britannica definition of the region.

As an example of the gap between state-by-state average credit limits, the average in top-ranking New Jersey is $37,845, and the average in bottom-ranking Mississippi is $21,676. That’s a difference of more than $16,000.

How do issuers decide credit limits?

When you apply for a credit card, the card issuer (i.e., Chase, Discover, Capital One, etc.) decides if you are creditworthy enough to qualify and, if so, the amount of money you can borrow. This amount is known as your credit limit, and each card issuer looks at the same basic factors to assign this figure.

Payment history

One of the most important factors credit card issuers look at when determining your credit limit is your payment history so far. This factor makes up the highest percentage of your FICO score, and credit card issuers are more likely to give you more access to credit if your payment history is flawless.

Credit utilization

Your credit utilization is a figure that represents the amount of money you owe in relation to your credit limit. Credit card issuers will look at your total utilization rate as well as your utilization rate across all of your revolving credit lines.

Generally, experts suggest keeping your credit utilization below 30 percent for the best results, which would mean having balances of $3,000 or below for every $10,000 in available credit you have. To quickly determine this percentage for yourself, check out Bankrate’s credit utilization ratio calculator.

Length of credit history

Credit card issuers also consider how long your credit history is, on average. A longer credit history with plenty of instances of responsibly using credit is considered a huge positive in the eyes of lenders.

Personal income and monthly expenses

Credit card issuers also look at how much money you earn, which makes sense since you’ll use your income to repay purchases you charge to your credit card. Your monthly expenses also are taken into account, since your bills eat up a certain chunk of your income each month.

Recent hard inquiries

Finally, credit card issuers look at recent hard inquiries on your credit report to determine whether to offer you credit, as well as how much. Lenders may see recent hard inquiries as a sign that you’re a risky borrower, and you may be denied a line of credit or be offered a lower credit limit as a result.

Is a low credit limit bad?

A low credit limit isn’t necessarily bad, but you’ll want to keep a few things in mind if you have a low credit limit on at least one card.

First, having a low credit limit makes it easy to show a high level of credit utilization. After all, charging $500 to a credit card with a $1,000 limit would leave you with a utilization rate of 50 percent on that card even though you owe a relatively small amount of money.

A low credit limit might also make it hard to put large purchases, such as furniture or vacations, on your credit cards. Finally, a low credit limit makes it more likely you’ll go over your credit limit without realizing it, which could trigger an over-the-limit fee on your account.

By the way, some credit cards enable consumers with low credit scores or no credit at all to build or rebuild their credit. This means using a credit card with a low limit can be worth it over time, especially if you can work toward getting a higher credit limit in the future.

How can I increase my credit limit?

If you want to increase your credit limit, you may be able to get it raised by simply calling your credit card issuer using the number on the back of your card and asking for a higher limit. Depending on your card issuer, you also may be able to ask for a credit line increase using your online account management page by logging into your online account.

When you request a credit limit increase, your card issuer may place a hard inquiry on your credit report to determine your eligibility. This isn’t the end of the world, but it’s worth considering if you would rather wait it out to see if your credit card issuer automatically increases your credit limit over time.

The bottom line

The average credit limit for Americans reached $29,855 across all age groups as of the third quarter of 2023, which is both good news and bad news. This much credit makes it easier for consumers to charge large purchases for convenience and rewards, yet it also opens the possibility of racking up considerable amounts of credit card debt.

Whether your credit limits are higher or lower than average, there are a few steps you can take to “win” when it comes to your credit rating and your financial health. Use your card for rewards and maximize your card’s benefits, yet refrain from carrying a balance unless you absolutely have to. Also make sure to always pay your credit card bill early or on time, and you’ll benefit from a high credit score and more purchasing power in the long run.