How do you determine credit limit?

Answer 1

In most circumstances, the better your credit, the higher your credit limits will be. Some credit-card companies will give you a big credit limit immediately, while some more conservative companies wait a few months of on-time payments before they give you a boost. Generally speaking, those companies willing to take a higher risk by offering you a high credit limit from the go, will compensate the risk by charging higher interest rates for financing your balances. Many times they look at debt to income ratio and depend on other clearing-house companies who collect consumer credit worthiness data in this matter. Credit-card companies monitor your credit status constantly. Although most companies limit credit increase to once or twice a year, they could choose to give you more increases based on your credit. If they perceive that you are a good payer and that you can consume more, and thus generate more income for them, they will continue to increase your credit limit. This can be extremely risky.