1. What is Credit Card Credit Limit?

The credit limit is the maximum amount of credit that a financial institution extends to a client on a credit card. In the Philippines, this is typically calculated as a percentage of your annual income.

2. How Does the Calculator Work?

The calculator uses the credit limit formula:

Where:

• \( income \) — Annual income in Philippine Pesos (PHP)
• \( Philippines\ factor \) — Typically between 0.20 to 0.30 (20% to 30%)

Explanation: Banks in the Philippines generally offer credit limits that are 20-30% of your annual income, depending on your creditworthiness.

3. Importance of Credit Limit Calculation

Details: Knowing your potential credit limit helps in financial planning and ensures you don't apply for cards beyond your means. It also helps maintain a healthy credit utilization ratio.

4. Using the Calculator

Tips: Enter your annual income in PHP and the Philippines factor (default is 0.20). The calculator will estimate your potential credit card limit.

5. Frequently Asked Questions (FAQ)

Q1: What is the typical Philippines factor?
A: Most banks in the Philippines use 20-30% of annual income as the credit limit, with 20% being most common for new applicants.

Q2: Can I get a higher credit limit?
A: Yes, with good credit history and higher income, some banks may offer up to 50% of annual income as credit limit.

Q3: Do all banks use the same calculation?
A: No, each bank has its own criteria, but most follow this general formula for initial credit limits.

Q4: How often can I request credit limit increases?
A: Typically every 6-12 months, depending on the bank's policies and your payment history.

Q5: Does this include supplementary cards?
A: No, supplementary cards share the primary cardholder's credit limit.