How Credit Card Limits Work in Australia

By the Aussie Credit Guide editorial team · Reviewed 5 October 2026

Your credit limit is the most you can owe on the card. It also follows you around: other lenders count the limit, not the balance, when they decide how much to lend you.

How a limit is set

When you apply, the provider must assess whether the card is unsuitable for you. As Moneysmart puts it, the limit is based on your ability to pay it back within three years. The provider looks at your income, living expenses, existing debts and credit report.

You don’t have to accept the limit offered. You can ask for a lower one when you apply, or at any time afterwards.

Limit increases

Card providers can’t send you an invitation to increase your limit. An increase only happens if you ask for one, and the provider must assess the request in the same way as a new application.

Lowering a limit

Providers must offer a way to reduce your limit online. Moneysmart notes that requests are typically processed within one to two business days. The limit can be reduced down to the card’s minimum limit, provided your balance is below the new limit.

Going over the limit

A transaction that would take you over the limit is usually declined. Fees and interest can still push a balance over the limit, and the excess is then usually added to the next minimum repayment.

Why the limit matters for a home loan

When you apply for a home loan or another loan, lenders generally treat a credit card as if it were fully drawn. They assume a monthly repayment based on the whole limit, commonly around 3% to 4% of it, even if you pay the card off every month.

On that basis a $10,000 limit can be counted as a commitment of $300 to $400 a month. Because a small monthly commitment supports a large amount of borrowing over 30 years, an unused card limit can reduce borrowing capacity by tens of thousands of dollars. Lowering or closing unused limits before applying for a home loan is a common step. How much difference it makes depends on the lender.

Limits and your credit report

Your credit report shows each account’s limit. It doesn’t show your balance. See credit scores in Australia.

Minimum limits on cards we list

Minimum limits on the cards we compare range from $500 to $6,000, and are shown on the all cards page.

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