WealthGuide
18 January 2025•Credit Cards

Understanding Credit Limits on Credit Cards in Ireland

Credit limits are an essential aspect of credit cards, determining the maximum amount you can borrow at any given time. For Irish consumers, understanding how credit limits are set and managed can help ensure responsible use and avoid unnecessary fees.

By WealthGuide

What is a Credit Limit?

A credit limit is the maximum amount your bank or credit card provider allows you to spend on your card. For example, if your limit is €1,500, you cannot exceed this amount without incurring penalties like over-limit fees. Exceeding your limit may also negatively affect your credit score.

How Are Credit Limits Determined?

In Ireland, banks calculate your credit limit based on several factors:

  • Income and Outgoings: Your salary and regular expenses are reviewed to assess affordability.
  • Existing Credit Commitments: Other loans, overdrafts, or credit cards you hold are considered.
  • Credit Score: Your repayment history and borrowing behavior are evaluated through the Central Credit Register.

Each provider has its own lending criteria. For instance:

  • AIB offers limits tailored to income and borrowing history, with some cards allowing limits up to €10,000.
  • Bank of Ireland provides minimum limits starting from €600 for students and €1,000 for other cards.
  • Permanent TSB (PTSB) sets a minimum limit of €1,000 for their credit cards.

Managing Your Credit Limit

  1. Increasing Your Limit:

    • You can request a higher limit after demonstrating responsible card use for at least six months. This may require a new application or credit assessment.

  2. Decreasing Your Limit:

    • Consumers can request a lower limit if they wish to manage spending better. However, ensure the new limit is not below your outstanding balance.

  3. Over-Limit Fees:

    • Spending beyond your limit incurs fees that vary by provider (e.g., €7 with AIB or €12.70 with An Post)[1]. Additionally, promotional rates may be revoked.

Why Credit Limits May Change

Banks may adjust your credit limit due to:

  • Concerns about your ability to repay.
  • Regulatory changes or updates to their product offerings.
  • Changes in your financial situation.

Key Takeaways

  • Always stay within your credit limit to avoid penalties and protect your credit score.
  • If you need more flexibility, request an increase after proving responsible usage.
  • Regularly review your spending habits and adjust your limit if necessary.

By understanding how credit limits work in Ireland, you can make informed decisions and use your credit card as a valuable financial tool responsibly.