The minimum credit limit is different for every American Express card and usually falls between $1000 and $3000. American Express explains that every credit card comes with a minimum credit limit and a maximum credit limit.
While the maximum credit limit is usually based on your personal financial circumstances, minimum credit limits are more often based on the type of card you choose. American Express offers 17 unique cards to its U.S. customers, each with its own minimum credit limit. However, these minimum credit limits are not listed along with offer details for AmEx card offers. In most cases, your specific credit limit will fall somewhere between the minimum and maximum credit limit allowable for your specific American Express Card.
Not sure how to choose the best American Express Card for you? Check out our list of 30 questions everybody should ask before choosing a new credit card. Otherwise, read on to learn more about how your credit limit will likely be determined when you apply for a card from American Express.
What is a credit limit?
Your credit limit is the set amount that your credit card issuer will loan you under the terms of your credit card agreement. Typically, when you hear the phrase “credit limit”, it is used to describe the maximum amount of credit extended to an account holder. So if your credit limit is $5,000, you may not exceed this sum in purchases on your credit card. However, every credit limit includes a minimum and a maximum amount.
What is a minimum credit limit?
A minimum credit limit is the lowest line of credit that card issuers will offer. As noted above, this number is usually based on the nature of the card itself. More exclusive rewards cards like the American Express Platinum Card may come with higher minimum credit limits whereas more accessible cash back cards like the Blue Cash Preferred Card may come with lower minimum credit limits.
How is my credit limit determined?
When you apply for an American Express Card, you actually have the freedom to specify the credit limit that you desire. This does not provide a guarantee that you will receive the maximum credit limit that you request, but your card issuer will take this information into account when determining your credit limit.
Specifying a credit limit is optional. If you do not specify a credit limit, American Express will assign one to you upon approval.
If you do opt to specify a credit limit, it is advisable that you specify a credit limit that aligns realistically with your financial circumstances. American Express will consider these financial circumstances to ensure that you meet the eligibility requirements for the credit limit you’ve requested.
What factors will American Express take into consideration to determine my credit limit?
Before approving your requested credit limit for your American Express card, your issuer will consider the following factors:
- FICO Credit Score
- Credit History
- Debt Utilization Ratio
- Debt to Income Ratio
- Income
Failure to align your requested credit limit with the financial details listed above could result in a rejection of your credit card application. Conversely, American Express advises explicitly against requesting a smaller credit limit in an effort to improve your odds of credit card approval. Choosing a low limit, says American Express, will not improve your chances of approval. The decision to approve your requested credit limit will be based on your financial fitness.
Can I change my credit limit?
It may be possible to change your credit limit upon request. American Express notes that customers have the right to make this request at any time either online or by calling the number on the back of their credit card. When you apply for a higher credit limit, you will be asked to provide some basic information, which will be used to determine whether or not you qualify for an increase in your line of credit. If you do qualify, your new line of credit will be available in as little as an hour.
It is also possible to request a lower credit limit if you are concerned that the credit limits on your American Express Cards are too high. This may be preferred by, for instance, those who apply for business credit cards to be used by employees or by parents sending their kids to college with an emergency card.
You may request a lower credit limit at any time, however there are two thresholds on how low you can reduce your credit limit:
- You may not request a credit limit lower than the minimum credit limit for your particular credit card offer; and
- You may not request a credit limit lower than your current statement balance.
Before you request a lower credit limit, be sure that this won’t negatively impact your credit utilization ratio. Reducing your available line of credit while carrying credit debt can raise your utilization ratio, which can in turn lower your credit score. On the bright side, you always reserve the right to request a higher credit limit at any time, even if you’ve already requested and been granted a lower credit limit.
To learn more, take a look at our article on why your credit score might have gone down.
Tips For Staying Within Your Credit Limit
American Express offers a few tips to help you stay comfortably within your credit limit.
- First and foremost, make sure you know what your credit limit is. Be conscious of this figure before making any big ticket purchases.
- Second, always make payments on time, do your best to pay down your full balance each month and, at the very least, always pay more than the minimum monthly payment to help offset interest charges.
- Finally, American Express strongly advises making use of its online account dashboard to keep track of your spending, what you owe, and when your next payment is due.
In short, the more responsible you are in how you spend and manage your account, the easier it will be to stay comfortably within your credit limit.
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Need a few more tips for managing your credit card responsibly? Check out our look at common credit card mistakes and how you can avoid making them.