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Understanding Your Pre-Approved PREMIER Bankcard® Credit Limit

How PREMIER Bankcard® evaluates your profile and assigns a credit limit once you activate your pre-approved Mastercard® offer.

Receiving a pre-approved mail offer from PREMIER Bankcard® means your credit profile met the issuer's initial criteria for the particular offer. However, the credit limit shown in the mailer is not necessarily a guarantee of the limit you will receive when you respond.

For example, an offer may advertise a credit limit of "up to $700." The phrase "up to" matters because the advertised amount represents the maximum credit limit associated with that offer, rather than a promise that every recipient will receive the full amount. The final account terms and credit limit are determined as part of the application and approval process.

This page explains what the advertised credit limit means, how a starting limit may be evaluated, the difference between your credit limit and available credit, and what to consider if the limit you receive is lower than expected.

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What Does "Up to $700" Mean?

If your PREMIER Bankcard® mail offer states that you could receive a credit limit of "up to $700," the wording describes the maximum amount associated with that offer. It should not automatically be interpreted as a guaranteed $700 starting limit.

The prescreening process takes place before you respond to the offer. When you accept or apply using the offer, the issuer can evaluate the information needed to make the account-opening decision and establish the applicable account terms.

A Simple Example

Suppose your mailer says "up to $700." That means $700 is the maximum amount referenced by that particular offer. It does not mean that responding to the mailer automatically results in a $700 credit line. The amount actually assigned to the account is determined during the issuer's application and approval process.

Pre-Approved Does Not Mean a Guaranteed Credit Limit

A pre-approved offer is the result of a prescreening process. The issuer has identified consumers whose credit profiles appear to meet criteria for a particular offer at the time the prescreening information was obtained. It is different from having an account already approved with a specific credit limit.

The distinction is important because the offer you receive is based on information available during the prescreening process. Responding to the offer still involves the application or account-opening process and the issuer's applicable review.

For more information about the difference between these stages, see our guide to PRE-APPROVAL vs. Full Approval.

How Your Initial Credit Limit Is Determined

There is no single publicly stated formula that lets a consumer calculate a PREMIER Bankcard® credit limit in advance. Credit decisions can involve information from the consumer's credit profile and information supplied during the application process.

Several areas of your credit profile can provide context when an issuer evaluates an application and determines account terms:

Credit Profile Information Why It Can Matter
Payment history Your record of paying existing credit obligations provides information about how you have handled credit in the past.
Existing accounts The number and type of accounts already on your credit profile can provide context about your current credit relationships.
Current balances Balances on existing revolving accounts can show how much of your available credit is currently being used.
Recent credit activity Recent applications and newly opened accounts can form part of the overall credit profile considered during an application.
Application information Information supplied as part of the application can be used along with credit-report information when evaluating the account.

These factors should be viewed as general credit-underwriting considerations, not as a published PREMIER formula for calculating a particular starting limit. A consumer generally cannot determine the exact credit line they will receive simply by looking at one credit-score number or one item on their credit report.

Why a Credit-Building Card May Start With a Smaller Limit

A modest starting credit line is common among cards marketed toward consumers who are building or rebuilding their credit. A smaller limit gives the account a defined amount of available revolving credit while the issuer evaluates how the account is managed over time.

For the cardholder, the size of the starting limit also affects how quickly a purchase can consume available credit. This makes it important to understand the relationship between the credit limit, account balance, and available credit.

A lower starting limit is not, by itself, a statement about your long-term credit prospects. It simply establishes the amount of revolving credit available on that account when it is opened.

Credit Limit vs. Available Credit

Your credit limit and available credit are two different numbers. The credit limit is the maximum amount of credit assigned to the account. Available credit is the amount remaining for new purchases after accounting for the balance and transactions affecting the account.

Example: A $700 Credit Limit

  • Credit limit: $700
  • Current balance: $250
  • Approximate remaining available credit: $450

The available amount can also be affected by pending transactions, payments, and other account activity. The account's current available-credit figure is therefore not necessarily the same as the original credit limit.

How a Small Credit Limit Can Affect Credit Utilization

The size of a credit line can also affect revolving-credit utilization. Utilization compares a revolving account balance with its available credit limit. Because a smaller limit provides less room between a purchase and a high utilization percentage, balances can represent a larger percentage of the credit line.

Credit Limit Balance Utilization
$300 $150 50%
$700 $150 21.4%

This is one reason cardholders with a relatively small starting limit may need to pay attention to their balances. Credit utilization is only one part of a credit profile, and the balance reported to the credit bureaus can differ from the balance you see at another point during the billing cycle.

Can Your PREMIER Credit Limit Increase?

A starting credit limit is not necessarily the permanent limit for an account. Whether an account becomes eligible for a higher limit depends on the issuer's policies and the circumstances of the account.

Consistent account management, including making payments on time and keeping balances under control, can be useful habits regardless of whether a credit-limit increase becomes available. However, responsible payment history should not be treated as a guarantee that a credit limit will increase.

For more information about credit-limit increases and their relationship to credit building, see How Credit Limit Increases Support Credit Building.

What If Your Starting Limit Is Lower Than Expected?

If you responded to a mail offer expecting the maximum advertised amount but received a lower starting limit, review the account-opening information carefully. The number in the original mailer should not be assumed to be a guaranteed credit line simply because it appeared prominently in the offer.

Before deciding how to use the account, confirm the actual credit limit, available credit, fees, APR, and other applicable terms. If you believe the account terms do not match what you understood from the offer, contact PREMIER Bankcard® using the contact information provided with your account.

You can also review our PREMIER Bankcard® Fees & Costs Explained and Understanding APR on Credit-Building Cards before deciding how the account fits into your credit-building strategy.

Things You Shouldn't Assume About Your Starting Limit

  • Receiving a pre-approved mail offer does not necessarily mean you are guaranteed the maximum advertised credit limit.
  • A particular credit score does not guarantee a particular starting credit limit.
  • A higher income does not automatically translate into a higher credit line.
  • Making payments on time does not automatically guarantee a future credit-limit increase.
  • A larger credit limit does not mean you should increase your spending.
  • The credit limit shown in a promotional mailer should be distinguished from the actual credit limit assigned to an approved account.

Using a Small Starting Limit Responsibly

If your account starts with a relatively small credit line, the simplest approach is usually to treat the available credit as a spending ceiling rather than a spending target. Keeping purchases manageable and making payments according to the account terms can help prevent the balance from becoming difficult to repay.

It can also help to monitor your balance during the billing cycle rather than waiting until the payment due date to see how much credit remains available. This is particularly useful when the starting limit is only a few hundred dollars.

Our guide to Responsible Use Strategies covers additional ways to manage a credit-building account.

Key Takeaways

  • A PREMIER Bankcard® pre-approved offer is based on a prescreening process and is not the same as having an account with a guaranteed credit limit.
  • If a mailer says "up to $700," the $700 figure represents the maximum amount referenced by that offer, not necessarily the amount every recipient will receive.
  • The actual credit limit is determined during the application and account-opening process.
  • Your credit profile and information provided during the application can be relevant to the issuer's evaluation.
  • Your credit limit and available credit are different numbers.
  • A small starting limit can make it easier for a relatively modest balance to represent a large percentage of available credit.
  • Responsible account management may help you establish a positive payment history, but it does not guarantee a future credit-limit increase.

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"Disclaimer: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post."