What Is a Credit Limit? How Do Credit Limits Work?

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
What Are Credit Limits?
What Determines Credit Limits?
Does a Credit Limit Affect Credit Utilization?
When Does a Credit Card Limit Reset?
When Does Credit Your Limit Reset After Payment?
Does Your Credit Card Limit Reset Every Month?
Is It Possible to Increase a Credit Card’s Credit Limit?
What Happens When You Reach Your Credit Card Limit?
Options When You Hit Your Credit Limit
Make a payment: First, you can make a payment to reduce your outstanding balance below your credit limit. In fact, you don’t need to wait until you receive a statement or until your payment is due; you can make a payment at any time. Ask to increase your limit: Alternatively, you can contact the card issuer and ask it to increase your credit limit. And if you hold other accounts with that card issuer, then you can request that a portion of your unused credit limit be reallocated to the account that has exceeded its limit. Wait it out: Lastly, you can simply do nothing. You can just continue to pay your credit card account in accordance with its terms until your outstanding balance falls below the credit limit again.
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About the Author
Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.
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