Reasons For Wanting a Lower Credit Limit

Information verified correct on October 1st, 2016
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Applying for credit cards with a low credit limit

When credit limits are discussed, it is usually within the realm of having the limit increased. Rarely do you hear that someone wants to have their credit limit decreased. You may wonder, ‘Why would anyone want to have his or her credit limit decreased?’ Well, this may be for a variety of reasons.

Self-Imposed Credit Limits

As the Ancient Greek aphorism describes, ‘Know Thyself.’ This is important when you are trying to make changes in your financial well-being. If you have a history of spending beyond what you are capable of repaying then lowering your credit limit would make it impossible for you to spend more than your self-imposed amount.

People may choose to do this in small ways. Lowering your credit limit is one way to get started on making changes in a positive direction. This can also force you to be less dependent on your credit card.

Obligation to a Loved One or Friend

Everyone needs bailing out at one point or another. If someone has bailed out a friend financially, however, there may have been conditions placed on the help. One of them may have been to change some limits on spending or getting rid of your credit card in order to receive the financial assistance that was needed at the time.

Low Credit Limit Credit Cards

Rates last updated October 1st, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee Min credit limit Max credit limit Minimum Income
St.George Vertigo Visa
St.George Vertigo Visa
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. $500 $40,000 Go to site More info
BankSA Vertigo Visa
BankSA Vertigo Visa
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. $500 Go to site More info
ANZ First Student Card
ANZ First Student Card
19.74% p.a. $0 p.a. annual fee for the first year ($30 p.a. thereafter) $500 $15,000 $15,000 Go to site More info
NAB Low Rate Credit Card
NAB Low Rate Credit Card
0% p.a. for 15 months (reverts to 13.99% p.a.) 0% p.a. for 15 months with a one off 2% balance transfer fee $59 p.a. $500 Go to site More info
NAB Velocity Rewards Card
NAB Velocity Rewards Card
0% p.a. for 15 months (reverts to 19.99% p.a.) 0% p.a. for 15 months with a one off 2% balance transfer fee $95 p.a. $500 Go to site More info
Bank of Melbourne Vertigo Visa Credit Card
Bank of Melbourne Vertigo Visa Credit Card
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. $500 $40,000 Go to site More info
NAB Qantas Rewards Premium Card
NAB Qantas Rewards Premium Card
0% p.a. for 15 months (reverts to 19.99% p.a.) 0% p.a. for 15 months with a one off 2% balance transfer fee $250 p.a. $6,000 Go to site More info
NAB flybuys Rewards Card
NAB flybuys Rewards Card
0% p.a. for 15 months (reverts to 19.99% p.a.) 0% p.a. for 15 months with a one off 2% balance transfer fee $95 p.a. $6,000 Go to site More info
NAB Low Fee Card
NAB Low Fee Card
0% p.a. for 15 months (reverts to 19.74% p.a.) 0% p.a. for 15 months with a one off 2% balance transfer fee $30 p.a. $500 Go to site More info
NAB Qantas Rewards Card
NAB Qantas Rewards Card
0% p.a. for 15 months (reverts to 19.99% p.a.) 0% p.a. for 15 months with a one off 2% balance transfer fee $95 p.a. $500 Go to site More info
ME Bank frank Credit Card
ME Bank frank Credit Card
11.99% p.a. $0 p.a. $1,000 $15,000 $25,000 Go to site More info
ANZ Low Rate
ANZ Low Rate
13.49% p.a. 0% p.a. for 18 months with 3% balance transfer fee $58 p.a. $1,000 $15,000 $15,000 Go to site More info
ANZ Frequent Flyer
ANZ Frequent Flyer
19.99% p.a. $95 p.a. $1,000 $15,000 $15,000 Go to site More info
ANZ First Visa Credit Card
ANZ First Visa Credit Card
19.74% p.a. 0% p.a. for 18 months with 3% balance transfer fee $30 p.a. $1,000 $15,000 $15,000 Go to site More info
David Jones Storecard
David Jones Storecard
0% p.a. for 48 months (reverts to 24.74% p.a.) $0 p.a. $1,000
ANZ Rewards Credit Card
ANZ Rewards Credit Card
18.79% p.a. $80 p.a. $1,000 $15,000 $15,000 Go to site More info
Westpac Low Rate Card
Westpac Low Rate Card
1% p.a. for 12 months (reverts to 13.49% p.a.) 0% p.a. for 18 months $59 p.a. $1,000 $30,000 $15,000 Go to site More info
NAB Premium Card
NAB Premium Card
0% p.a. for 15 months (reverts to 19.74% p.a.) 0% p.a. for 15 months with a one off 2% balance transfer fee $90 p.a. $6,000 Go to site More info
NAB Velocity Rewards Premium Card
NAB Velocity Rewards Premium Card
0% p.a. for 15 months (reverts to 19.99% p.a.) 0% p.a. for 15 months with a one off 2% balance transfer fee $150 p.a. $6,000 Go to site More info
Newcastle Permanent Value+ Credit Card
Newcastle Permanent Value+ Credit Card
11.49% p.a. $49 p.a. $500 $20,000 Go to site More info

Improving One’s Credit Score

This may not be common knowledge, but you can improve your credit score by lowering your credit limits. If you have many high balances on your credit cards then it is worth your time to consider lowering your credit limits in order to gain a higher credit score. In fact, many who have high balances choose to have a low credit limit to obtain better marks on their credit record.

How to Lower Your Limit

In order for you to decrease your credit limit, you will need to contact your credit card provider personally. Many providers offer options of modifying your credit card details online but this is usually for increases only.

Because of the rarity of the request, you may need to ask immediately to a manager to handle the transaction. There is not typically a procedure to handle this type of request.

A word of caution should be heeded, as well. If you are lowering your limit, you should be careful not to decrease it below your balance. Doing so could result in penalty charges which would negate the reason for lowering it in the first place.

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2 Responses to Reasons For Wanting a Lower Credit Limit

  1. Default Gravatar
    Lilia | August 24, 2016

    I have just been charged bankruptcy.Is it too early to apply for a low amount on a credit card?

Credit Cards Comparison

Rates last updated October 1st, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Enjoy a 0% p.a. balance transfer offer for 18 months and also earn 2 bonus Velocity Points in the first 3 months on everyday spend.
20.74% p.a. 0% p.a. for 18 months $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
ME Bank frank Credit Card
Enjoy a low and consistent interest rate on purchases and cash advances, combined with no annual fee.
11.99% p.a. $0 p.a. Go to site More info
St.George Vertigo Visa
Introductory offer of 0% p.a. for 18 months on balance transfers and 1% p.a. for 12 months on purchases, plus a low annual fee.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Go to site More info
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
19.99% p.a. 0% p.a. for 15 months $149 p.a. Go to site More info

* The credit card offers compared on this page are chosen from a range of credit cards CreditCardFinder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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