What is a credit limit?
Quick summary
Your credit limit is the most you can spend on the card. The card issuer sets it, and it needs your consent to raise it. Using less than 30% of it is good for your score. Next step: see why a limit may go down.
Checked November 2, 2026. Main source: Financial Consumer Agency of Canada, How credit cards work. Checked November 2, 2026.. See all 3 sources.
Key facts
- Who sets it
- The card issuer
- Source: FCAC, How credit cards work, read Nov 2, 2026
- Raising it
- The issuer needs your consent to raise it
- Source: FCAC, read Nov 2, 2026
- Credit use
- Under 30% of your limit
- Source: FCAC, Improving your credit score, read Nov 2, 2026
What it means
- Your credit limit is the most you can spend on the card.
- When you pay down your balance, you get that credit back.
- The card issuer sets your limit when you get the card.
- You can ask the issuer to raise or lower it.
Source: Financial Consumer Agency of Canada, How credit cards work. Checked November 2, 2026.
Can they raise it without asking?
For an increase, the issuer must get your permission. It can be written or spoken. If you say yes by phone, the issuer must confirm in writing no later than your next statement.
Under the agency's guidance, using the card does not count as consent, and one general permission for all future increases is not enough. The guidance is from 2011. The agency says its newer framework from June 30, 2022 comes first where the two differ.
Sources: Financial Consumer Agency of Canada, How credit cards work and its guidance on consent for credit limit increases. Checked November 2, 2026.
Going over the limit
- You are responsible for staying within your limit, and you may be charged an over limit fee.
- Federally regulated institutions cannot charge over limit fees in some cases, such as a store hold that goes over your limit.
- You can ask your institution to block transactions that go over your limit. Not all institutions offer this.
- Missing the minimum payment may raise your interest rate.
Source: Financial Consumer Agency of Canada, How credit cards work. Checked November 2, 2026.
Your limit and your score
The agency suggests using less than 30% of your total limit. Example: a $5,000 limit with $1,000 used is 20%.
Source: Financial Consumer Agency of Canada, Improving your credit score. Checked November 2, 2026.
Questions people ask
What is a credit limit?
The most you can spend on a credit card. You get the credit back as you pay down the balance.
Can a bank raise my credit limit without asking?
No. The issuer must get your permission, and confirm it in writing no later than your next statement if you agree by phone.
What happens if I go over my limit?
You may be charged an over limit fee. Federally regulated institutions cannot charge it in some cases, such as a store hold.
How much of my limit should I use?
The agency suggests less than 30% of your total limit.