Tae-Nyun Kim Associate Professor of Finance, was recently featured in WalletHub’s piece on “Credit Limit Guide: Everything You Need to Know 2025.”
Do you think credit card companies should be more transparent about their cards’ limits?
Yes, credit card companies should be more transparent about how they determine credit limits and whether a customer’s limit is likely to change over time. Many consumers are approved without knowing in advance what their limit will be, which can lead to confusion or financial missteps, especially if the limit is much lower than expected. Transparency would help users plan better, compare cards more effectively, and avoid potential bankruptcy problems.
What advice do you have for people who want a higher credit limit?
First, you need to build a good payment history. Paying on time, ideally in full, will help you improve your credit scores, in turn, obtain a higher credit limit. Also, you need to use the card regularly but responsibly. This responsible pattern of card usage will show that you can manage credit wisely. Finally, increased income will help you get a higher credit limit. If you have not reported updated income to the card issuers for a while, you need to update it.
Do you have any tips for managing a low credit limit?
Yes, managing a low credit limit takes some planning:
- Keep your credit utilization below 30%, ideally under 10% if possible. For example, if your limit is $500, try not to carry more than $50–$150 at any time.
- Pay more than once a month. Making multiple payments during a billing cycle can keep your balance low.
- Use it only for small, regular purchases. This builds history without risking a high balance.
- Avoid maxing it out. Even if you pay in full later, maxing out the card can hurt your credit score.
- Monitor spending closely. Use budgeting tools or alerts to avoid overspending.