Guide to high spending limit credit cards

What is a high limit credit card?

A high limit credit card increases your borrowing power by letting you charge much more to the card than you’d be able to if you were using a regular credit card.

Also known as premium credit cards, or gold or platinum cards, they’re designed for wealthier individuals with a high annual income and who have a good credit rating.

The highest credit limit you can usually get with a standard credit card is around £5,000.

But with a high limit credit card, your maximum spend can run into tens of thousands of pounds, and these cards often come with plenty of perks and rewards for spending.

How do high limit credit cards work?

You can get high limit credit cards from a wide range of UK banks and credit card providers.

When you apply for a card, the credit limit you’re offered - the maximum you can borrow on the card at any one time - is unique to you and your circumstances.

Aimed at big spenders, they provide much higher credit limits and may even offer unlimited borrowing in some cases. Premium cards usually also offer perks and reward points.

However, because the cards can hold such large balances, your financial circumstances and credit record will be checked very carefully and eligibility requirements can be a lot stricter.

Just like standard credit cards, you’ll need to repay at least the minimum amount each month and you’ll be charged interest on anything that isn’t paid off in full.

Am I eligible for a high limit credit card?

Your eligibility and the credit limit offered to you will depend on the card provider’s assessment of a number of factors, including your:

• Credit history - This will show lenders your previous reliability as a borrower
• Age - Most card providers require you to be at least 21 and a UK resident
• Annual salary - You’ll need to earn a minimum salary of around £50,000 per year (this will differ between providers though)
• Financial situation - Your savings, monthly expenses and any other credit cards you have may be taken into account
• Existing accounts and cards - Sometimes you’ll only be eligible or invited to have a card if you already hold an account or another financial product with the provider

What perks can I get with a premium credit card?

As well as allowing you to benefit from a much higher spending limit, these cards often come with other perks and rewards, like:

• Travel insurance
• Reward points, vouchers and airmiles
• Concierge and personal assistant services
• Breakdown cover
• Home emergency cover
• Access to airport lounges
• Exclusivity to VIP tickets and restaurant bookings
• A higher level of protection for your purchases

What costs and fees are associated with a high limit credit card?

To help card providers balance the risk of large amounts potentially being charged to the card, high limit credit cards usually come with a higher interest rate.

So if you don’t pay a large balance off in full, the interest charges will quickly add up.

And if you don’t pay your minimum balance on time, you’ll be charged a late payment fee as well as interest.

These cards also often come with large annual fees that help pay for the perks they provide.

The annual fee can be several hundred pounds, so you’ll need to weigh up whether the benefits are worth it.

What are the pros and cons of high limit credit cards?

Although a higher spending limit might be appealing, it’s worth reading our pros and cons to help you make a balanced decision:

Pros

• The higher limit allows you to make more expensive one-off purchases
• Using the card responsibly is a great way to maintain a good credit score
• It can provide extra spending power when you need it
• It can help you to earn more rewards like airmiles
• Many cards come with extra perks like travel insurance and concierge services

Cons

• The cards with the most perks and rewards tend to charge the highest annual fees
• You could be tempted to spend more than you can afford to repay each month
• A standard card with a 0% interest option is likely to be better for balance transfers
• The high interest rate could lead to debt if you can’t make your payments on time
• Once you apply, you may not get the high credit limit you were hoping for

Can you get a credit card without a credit limit?

No, it’s not normally possible to have a credit card without a credit limit - although exceptions may be made for particularly high-net-worth individuals.

Your card provider will decide your credit limit based on your financial history and circumstances.

The less risk there is for the lender, the higher the credit limit they’ll be prepared to offer - but these decisions are made on a case-by-case basis.

Is a high limit credit card right for me?

This will largely depend on your personal circumstances and lifestyle, and how you intend to use the card.

For example, high limit cards can be useful if you need to make any large one-off purchases.

And if you’re confident you’ll be able to pay off your balance each month, using the card for your normal spending can be a good way to maximise rewards like airmiles.

But it’s important to make sure any perks that come with the card are worth the annual fee.

And be aware, that if you’re not able to pay larger balances off in full, the high interest rate you’ll be charged could quickly outweigh any benefits and increase what you owe.

Does my credit limit affect my credit rating?

Having a high credit limit on its own won’t influence your credit score. Instead, what’s important is how much of the credit limit you use.

As a general rule of thumb, it’s best not to use more than 30% of your available limit each month. Regularly getting near your spending limit could damage your credit rating.

And if you go over your credit limit, you’ll not only face a late payment fee, but it’ll be logged on your credit report and could affect your chances of borrowing in the future.