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How is credit limit for personal credit cards determined?

Friday, August 1, 2014

The purpose of a blog post could be "A" but people could end up seeing "B". It has happened in my blog before and, going by the comments generated on FB, it happened again for my last blog post.

I am not complaining, really. I am just amused by how sometimes we can have unintended consequences which can be good things too, of course.

Some comments:

"I thought the credit limit should be 2x monthly salary only. MAS guideline, I remember. Or no longer in force?"

"std chartered gives a $100000 limit to everyone...the manhattan card i am referring to specifically. anyone else care to share?"

"Strange, ocbc gives my hubby credit limit of only half of his monthly income. We do not have any loan with them. Guess they do not want us to spend more money... We never get 2x or 3x our income. Usually only get 1x of our monthly limit or lesser."

"the banks will do a check with credit bureau. its just like when u open a stock trading acct, there is a financial background check..."

"So, if a person has no debt, pays his bills on time or has more unencumbered assets, he gets a higher credit limit?"

"That's the part I don't understand. We have no car loan, no house loan, we don't have overdue credit cards, no personal loan... How come our limits are so low?"

Including myself, it seems that not many know clearly how credit limits for personal credit cards are determined. So, I did a bit of research and found this:

Interesting, isn't it?

To read more on this topic, visit Moneysense:

Related post:
An easy way to improve cash flow in life.


AK63 said...

Hi, just want to share abit....

I used to have a StanChart card with $100,000 limit, but have never used more than $2,000 at any one time....

Then was AMEX card with $50,000 limit, didn't use much except on travels....

Preently holding POSB card with $25,000 limit, same, never used much, not even during my recent 14-day trip to Thailand....

Btw, all the above are supplementary cards, I got no sustainable and consistent income too....

AK71 said...

Hi AK63,

Supplementary cards will have credit limits determined by the income level of the principal card holder, right? So, in your case, not having any consistent income is not an issue. :)

OT83 said...

Haha. My credit limit is 1k only :) why?

AK71 said...

Hi OT83,

You called them and asked them to lower it to $1K is my guess. ;)

AK63 said...

Ah, thanks for clarifying, always wondered but never bothered to find out why cos not my problem mah.... :p

I remembered what my younger sister said when she handed me the StanChart card, she said I can buy a nice car with it, and I answered Siao Eh!! But sibei stressed sia, was so worried about losing it through theft or pickpocket then.... :(

I've never liked to use credit cards if I can help it, and if I did, I'll pay back my sis the moment I receive the statement. But my sis always has this bad habit of not paying full the outstanding amount until always receive red letters, don't understand why she keeps doing it.... :(

AK71 said...

Hi AK63,

It is definitely a good idea to use credit cards instead of cash whenever possible. If we know how to fully max out the benefits, credit cards can help us to save quite a bit of money. The important thing to remember is to pay on time and in full. :)

If you still have the Standard Chartered credit card, ask your sister to request for a lowering of the credit limit on your supplementary card since you never use more than $2,000 per month and are afraid of the liabilities if you should lose it for some reason. That will give you a peace of mind. ;)

Kexin said...

Some banks also have strange policies. I hold two cards from the same bank. When I applied using my payslip, I was given 2x credit limit. When I used CPF records, I was given 4x :)

AK71 said...

Hi Kexin,

That is strange indeed! That doesn't make much sense, does it?

Well, you know what they say about facts being stranger than fiction sometimes. -.-"

Anonymous said...

I assume the payslip is the most recent month payslip.

CPF recordS allowed the captured of information such as your EOY bonus, performance bonus, and the trend of your income.

Singapore Man of Leisure said...


Just chipping in to say that before we quit our jobs and saunter into "sabbatical from work", make sure you have a few good credit cards with AMPLE credit limits.

I realised I can't apply for any new credit cards or increase my credit limits liao :(

For eg, if you have a self-imposed credit limit of $5,000 and you retire at 45, it ain't going to go very far if we live up till 85 ;)

So update your credit limits BEFORE you jump into entrepreneurship or take you sabbatical ;)

AK71 said...


Yes, that is a good reminder. I have read stories from retirees on this issue before.

Passive income? Simi lai eh? We don't recognise this hor. -.-"

OT83 said...

Haha. Ak so smart!!

pf said...

I thot AK no need any credit. U can flip open ur war chest!

AK71 said...

Hi pf,

I am a firm believer of using credit cards whenever possible. I get cash back when I use credit cards. Why would I want to pay with cash? ;p

Anyway, war chest is for investment, not for consumption! Yeah! ;)

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