Credit Cards & Borrowing Power
How credit card limits affect your borrowing capacity even if you have no balance.
How Credit Card Limits Affect Borrowing Power (Even With $0 Balance)
A common surprise: credit card limits can reduce borrowing power even if you owe nothing.
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Why the limit matters
Many lenders assess credit cards using the limit, not the balance, because the limit represents potential future spending.
Quick wins
- Reduce unused limits
- Close unused cards
- Avoid multiple store/BNPL-style limits
FAQ
Should I close my credit card before applying?
Reducing limits or closing unused cards can increase borrowing capacity, but consider your personal situation first.
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