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Q: I’m thinking about applying for a student credit card. What will my credit limit be?
A: As you probably know, credit limits vary from card to card and from person to person.
While one person with a Discover it card may have a limit of $5,000, another person with that same card may have a limit of $20,000. With that having been said, initial credit limits for student cards are usually low, often around $500 to $2,000.
Those who usually get student credit cards are often young, broke, and haven’t had a chance to establish credit yet.
Because of that, credit card companies aren’t willing to risk several thousand dollars on these customers like they will with customers with long, solid credit histories who are already making $50,000 a year. After all the risk is higher and the payoff is lower. (The more you use your card, the more they make…and adults, on average, use their cards more than young students).
When you keep in mind that credit card companies like low risks and high profits, it’s easy to figure out how to get a higher credit limit.
Making more money often helps (I know, I know, easier said than done), since they make more money off of you when you buy more stuff, and they don’t have to worry about you being able to afford it.
Paying your balance on time lets them know that you are responsible. Using your card, but not to the point where you’re maxing it out, also makes them want to work with you, since each swipe puts money in their pockets.
After a year or so of using your card responsibly, if your credit limit hasn’t gone up, you can call your credit card company and ask them for a higher limit.
If they see you as a valuable customer, they will be happy to comply.
That’s how a few people have gotten credit limits of up to $10,000+ on a student card, which traditionally has a very low credit limit.