How your income affects your credit limit

Quick insights

• Your income can have an impact on your credit limit through your debt-to-income ratio.
• It’s hard to know the average credit limit based on salary due to limited data, and factors other than income can have a greater impact.
• If your income increases, you may want to notify your credit card issuer and see if you are eligible for a higher credit limit.

Your credit card limit is based on based on income among other factors, including payment history, payment amounts, credit score, utilization and, in the case of a credit limit increase, the tenure of the card member’s relationship with the card issuer.

One of the ways your income affects your credit limit is through a calculation called debt-to-income or DTI ratio. This ratio is how your debt relates to your income, and it gives lenders a sense of how much of your income goes toward debt payments every month. They use it to assess how much capacity you have to take on more debt.

Here’s what you need to know about your DTI and credit limit.

How your debt-to-income ratio is calculated

Calculate your DTI by dividing your total monthly debt obligations by your gross monthly income. Gross monthly income is what you earn before taxes and other deductions are taken out, and debt obligations include your mortgage or rent, auto loans, credit card monthly payments (minimum payments), student loans and other debt payments. Non-debt expenses, such as groceries, utilities and insurance are not factored in.

A lower DTI with higher income could lead to a higher credit card limit. According to Experian, some lenders may prefer a DTI below 36%.

Typical credit card limit by income

Wondering about the typical credit card limit by income? Since income isn’t the only consideration in determining your credit limit, it’s likely that there’s variation across income brackets, but it’s hard to come by data on the typical credit limit by income.

Experian notes that the average credit limit was $29,855 at the end of the third quarter in 2023. This figure is based on a person’s total credit limit across multiple credit cards.

To evaluate whether you have a “good” credit limit, consider your credit history and score, payment history for the credit card and DTI. If you would like to improve your credit score, you can find free online credit tools that offer you access to your credit score, credit report, credit and identity monitoring alerts, educational articles and more.

Why you should update your income with credit card issuers

While it’s important to give accurate income information when you apply for a credit card, you’re not required to report updates to your income. Nevertheless, it may benefit you to do so. If your income increases and you notify the credit card company, it could result in an increase to your credit limit. If it doesn’t happen automatically, you can request a credit limit increase, which you may be able to do online or over the phone. Before you make the request, you may want to review this guide on how to increase your credit limit so that you have the information that may be requested of you.

Updating your income with Chase

If you are a Chase cardmember, you may want to keep your income up-to-date with Chase. This can help ensure your account is continuously evaluated for credit limit increases.

Chase allows you to update income in your account profile. Once you sign in, you’ll see your current income information in your account profile. If the income is not accurate, you can update it there.

If you don’t automatically get a credit limit increase, you can call the number on the back of your card to request one. Of course, you may want to consider whether a credit limit increase is a responsible choice for you.

In summary

Your income impacts your credit limit via your DTI ratio, but it’s not the only factor in how credit card companies assess your limit. Credit history, credit score, debts and other payment obligations can also impact your credit limit. If your income has increased, it may be helpful to notify your card issuer because it could result in an increase to your credit limit.