Every credit card comes with a predetermined credit limit based on the lender’s assessment of your credit status. You are then only allowed to spend money up to the specified limit. High credit limit credit cards are generally considered cards with a $20,000 or above limit.
High limit credit cards are useful financial vehicles that can add flexibility to your credit line when used properly. With an increased credit limit, you may be able to, for example, transfer balances from several other cards into one easy-to-manage account.
Types of credit cards with high limits
Different types of high credit limit credit cards are available from various banks, lenders and supermarket credit card providers. These include high limit balance transfer credit cards, charge cards, business and corporate cards, Gold, Platinum, and Black level cards.
Gold, Platinum, and Black credit cards
Premium credit cards cater to high-income individuals and frequent spenders with elevated credit limits and added luxuries such as generous rewards programs, complimentary travel insurance, concierge services, and airport lounge access.
It's important to pay the balance in full each month since the interest incurred on a large balance quickly negates the value of the points earned.
However, it's important to note that premium cards often come with high annual fees and interest rates.
Balance transfer credit cards
If you need to transfer a large balance, make sure the credit limit is sufficient to accommodate it. Additionally, there is a balance transfer limit to take into consideration too. This limit defines how much of the total credit limit can be used for balance transfers. Balance transfer limits typically range between 70% and 100% of the because they require the full outstanding balance to be paid monthly approved credit limit, depending on the card issuer.
0% purchase credit cards
This type of offer provides a window of time during which interest is not charged on purchases, allowing you to spread out the cost of a large expense over a few months.
Having a high credit limit on your card can be especially beneficial in this scenario, as it gives you the ability to make a substantial purchase without overextending your credit.
Business credit cards
Not only do credit cards for businesses have higher credit limits on average to accommodate larger purchases, but they also come with additional features designed specifically for businesses, such as the option to issue multiple employee cards and seamless integration with popular accounting software, such as Xero, QuickBooks, and Quicken.
Charge cards
Charge cards differ from credit cards in that they require the full outstanding balance to be paid every month. As a result, they don't have a credit limit or a pre-set spending limit, although the issuer — typically American Express — will conduct periodic audits of your creditworthiness. Charge cards are available for personal, business, and corporate use.
For example, a charge card could offer a business with a large ad spend each month more financial flexibility than a credit card with a set credit limit.
Important things to keep in mind about high limit credit cards
As you make the decision to move to a high credit limit credit card you need to be sure you have carefully analysed your financial needs. In some cases, applying for a higher credit limit may not be the right option for you.
Spending habits
If you are thinking of getting a high limit card so that you have a larger credit allowance for online shopping, holidays, a new car or other big expenses, then you need to ensure you are going to have funds to pay the balance off over a reasonable time frame. There are cheaper ways to borrow large amounts, but a credit card can work well if you have a long interest-free period and can repay the balance before that window ends.
Eligibility
Before you are approved for the card the lender will take a look at your payment history on existing credit commitments, as well as your overall credit history and credit score. If they assess that you haven’t been paying down your balances enough each month, your application for a larger limit is likely to be declined. On the other hand, you may find that you are often offered more credit when you don’t actually need it.
Interest rates
Using a credit card with a high limit can introduce serious financial problems if not managed properly. Since most of these cards have standard — or higher — interest rates, not paying the balance in full each month can result in significant interest charges. If you are unsure about your ability to repay the balance, it may be better to consider other options.
FAQs
What is the highest credit limit for an Australian credit card?
Credit cards with maximum credit limits of $100,000 are available, possibly higher. Credit limits on charge cards can be higher still.
Are there any credit cards with no credit limit?
No. But some charge cards, which are not technically credit cards since they must be repaid in full every month, have no pre-determined limit.
Is a high credit limit good for your credit score?
One of the important determining factors used to calculate credit scores is known as the credit utilisation ratio, that is to say, the amount of the total credit limit used. Therefore, having a high credit limit and carrying a small balance can show responsible use and help improve your credit score. However, a high credit limit — even if it is not being used — can have negative
