Credit limits drop in 36 states, Utah and Minnesota see biggest declines

Credit limits have decreased in 36 out of 50 states over the past year, according to a WalletHub analysis reported by Fox9. This trend could negatively impact credit scores, as lower credit limits can increase credit utilization ratios.

WalletHub analyst Chip explained that factors such as rising credit card debt, delinquency, declining credit scores or income, and inflation contribute to credit limit reductions. Inflation, in particular, forces consumers to charge more to their cards, raising utilization and delinquency risks.

Utah topped the list for the largest credit limit decrease in terms of total borrowing power lost, despite not having the highest percentage drop. This is notable given Utah residents generally have high credit limits and strong financial positions, providing more flexibility in managing credit.

Minnesota ranked second for the largest credit limit decreases, with an 8% drop from June 2025 to June 2026. Montana saw the highest percentage decrease at 13%, indicating a widespread reduction in credit availability across various states.

These declines in credit limits could lead to lower credit scores due to higher utilization ratios and potential delinquent payments being reported to credit bureaus, according to WalletHub and Fox9.

What we're watching: How continued economic factors like inflation and debt levels might influence credit limits and consumer borrowing power in the coming year.