MIAMI—Credit limits are shrinking across nearly the entire country — a signal that households may be bumping up against tighter lending standards and growing financial stress.
According to a new report from WalletHub, average credit limits fell year-over-year in 46 of 50 states as of the second quarter of 2025, with cuts ranging from less than 1% to more than 16%. Wyoming residents were hit hardest, seeing the steepest drop in available credit both overall and on newly opened cards.
“A variety of factors can result in credit limit reductions, such as big increases in credit card debt, delinquency on that debt, or a decline in credit score or income. Inflation also plays a role, as it forces people to charge more to their credit cards, raising their credit utilization and putting them more at risk for delinquency,” noted - WalletHub Analyst Chip Lupo.
“Residents of Wyoming had the largest year-over-year decrease in their credit limits. The average person’s credit limit over the 12-month period ending in June 2025 was around 16% lower when compared to the previous 12-month stretch,” Lupo said. “In addition to a big overall decrease over the past year, Wyomingites also had the third-largest decrease in the average credit limit on credit cards opened specifically in Q2 2025, compared to in Q2 2024. The average credit limit was nearly 22% lower.”
Alaska ranks second among the states where people got the most credit limit decreases as of Q2 2025. Alaska’s year-over-year credit limit decrease was among the steepest in the nation, with nearly a 12% drop, the third-largest decrease. WalletHub noted that Alaska ranks among the bottom 10 states for income, placing 44th in the nation.
Vermont residents faced the third-largest credit limit reductions over the past year, when considering both the percentage decreases and the actual dollar amount changes they resulted in, WalletHub explained. The average resident’s credit limit over the 12-month period ending in June 2025 was nearly 5% lower than during the previous 12-month period. In addition, the average credit limit on new accounts opened during Q2 2025 was around 23% lower compared to those opened during Q2 2024.