Why do credit cards have minimum limits?
I believe it's just to limit the less well-off from acquiring one. If your credit history and income do not support a $15,000 credit limit, then don't even think about applying for an Altitude Black card. If they do, then don't bother with a student card. It's primarily about market segmentation by wealth or income. They have a minimum to discourage applications for that particular card. Every application costs them money because they have to pay the credit agencies to pull the applicant's credit history. So one way they save money and reduce their cost of business is to discourage people from applying if they're not creditworthy enough for that product. Credit card companies tailor their products into different income/credit brackets. Those who have less creditworthiness would be better suited for a different product than what you're referring, similar to those with greater creditworthiness. It discourages people from obtaining a high-limit card simply to show off, because the bank's forcing them to use it or lose it.
"A credit card is a way to borrow money. That's all. Sometimes the loans are very small - $5 - and sometimes they are larger. You can have a credit card with a company (bank or whatever) that you have no other relationship with. They're not a property of a bank account, they are their own thing. The card you describe sounds exactly like a debit card here, and you can treat your Canadian debit card like your French credit card - you pay for things directly from your bank account, assuming the money is in there. In Canada, many small stores take debit but not credit, so do be sure to get a debit card and not only a credit card. Now as to your specific concerns. You aren't going to ""forget to make a wire."" You're going to get a bill - perhaps a paper one, perhaps an email - and it will say ""here is everything you charged on your credit card this month"" along with a date, which will be perhaps 21 days from the statement date, not the date you used the card. Pay the entire balance (not just the minimum payment) by that date and you'll pay no interest. The bill date will be a specific date each month (eg the 23rd) so you can set yourself a reminder to check and pay your bill once a month. Building a credit history has value if you want to borrow a larger amount of money to buy a car or a house, or to start a business. Unlike the US, it doesn't really have an impact on things like getting a job. If you use your card for groceries, you use it enough, no worries. In 5 years it is nice to look back and see ""never paid late; mostly paid the entire amount each month; never went over limit; never went into collections"" and so on. In my experience you can tell they like you because they keep raising your limit without you asking them to. If you want to buy a $2500 item and your credit limit is $1500 you could prepay $1000 onto the credit card and then use it. Or you could tell the vendor you'd rather use your debit card. Or you could pay $1500 on the credit card and then rest with your debit card. Lots of options. In my experience once you get up to that kind of money they'd rather not use a credit card because of the merchant fees they pay." There is one massive catch in this which I found out when I went to Nationwide to ask for a loan. I've got a credit card which they kept increasing my credit limit, it's now at something ridiculous - nearly £10,000 but they keep increasing it. I never use that card, when I went to Nationwide though they said they couldn't give me a loan because I had £10,000 credit already and if I reduced this credit this would affect my credit rating and they could potentially give me a loan. I then realised what MBNA had craftily done.  I have two cards with this bank, one with really low interest and the other with really high interest (and a high credit limit) - even though the other card has a zero balance loan companies still see it as money I could potentially go and spend, it doesn't matter to them that I've not spent any money on that card in about 12 months, to them it's the fact that they could give me a loan and then I could go and spend another £10,000 on that card (as you can see extremely risky).   Of course this means that what MBNA are craftily doing is giving me such a high credit, knowing full well that I'm not going to use it, but it also prevents their competitors from offering me a loan, even at a lower rate, because I've already got too much credit available. So yes there is a catch to giving you a high credit limit on your cards and it's to prevent you from either leaving that bank or getting a lower interest rate loan out to clear the debt. "This does not directly address the question, but how the Bank views your behaviour is not the same as a credit reporting bureau.  If you do not ""go deep"" on your card at all, you may be deemed not to be exercising the facility, indeed they may ask you to reduce your credit limit. This is not the same as ""missing a payment"". At the same time, do not just make the minimum payment. Ideally you should clear it within 3 months. Think of it as a very short term line of credit. Not clearing the balance within three months (or turning it over) demonstrates a cash flow problem, as does clearing it from another card. Some banks call this ""kite flying"" after similar behaviour in older days with cheque accounts. If you use the credit and show you can pay it off, you should never need to ask for a credit increase, it will be offered. The Bureau will be informed of these offers. Also, depending upon how much the bank trusts you, the Bureau may see a ""monthly"" periodic credit review, which is good if you have no delinquencies. Amex does this as a rule." Is my understanding okay ? If so, it seems to me that this system is   rather error prone. By that I mean I could easily forget to make a   wire some day and be charged interests while I actually have more than   enough money on the check account to pay the debt. Which is where the credit card company can add fees so you pay more and they make more money. Don't forget that in the credit case, you are borrowing money rather than using your own. Another thing that bothers me is that the credit card apparently has a   rather low credit limit. If I wanted to buy something that costs $2500   but only have a credit limit of $1500, can I make a preemptive wire   from my check account to the VISA account to avoid facing the limit ?   If so, what is the point for the customer of having two accounts (and   two cards for that matter...) ? If you were the credit card company, do you believe people should be given large limits first? There are prepaid credit cards where you could put a dollar amount on and it would reject if the balance gets low enough. Iridium Prepaid MasterCard would be an example here that I received one last year as I was involved in the floods in my area and needed access to government assistance which was given this way. Part of the point of building up a credit history is that this is part of how one can get the credit limits increased on cards so that one can have a higher limit after demonstrating that they will pay it back and otherwise the system could be abused. There may be a risk that if you prepay onto a credit card and then want to take back the money that there may be fees involved in the transaction. Generally, with credit cards the company makes money on the fees involved for transactions which may come from merchants or yourself as a cash advance on a credit card will be charged interest right away while if you buy merchandise in a store there may not be the interest charged right away. "Until the CARD act, credit card rules required that merchants had no minimum purchase requirement to use a card. New rules permit a minimum but it must be clearly posted.  Update - Stores can now refuse small credit card charges is an excellent article which clarifies the rules. It appears that these rules apply to credit, not debit cards. So to be clear - the minimum do not apply to the OP as he referenced using a debit card.  ""Superiority""? Hm. I'd be a bit embarrassed to charge such small amounts. Although when cash in my wallet is very low, I may have little choice. Note, and disclaimer, I am 48, 30 years ago when I started using cards, there were no POS machines. Credit card transactions had a big device that got a card imprint and the merchant looked up to see if your card was stolen in a big book they got weekly/monthly. Times have changed, and debit cards may be faster, especially if with cash you give the cashier $5.37 for a $2.37 transaction, but the guy entered $5 already. This often takes a manager to clear up." "I'm not sure if the rules in Canada and the US are the same. I'm as amazed as you are by the amounts of debts people have, but I can see how this credit can be extended. Generally, with good credit history and above average pay - it is not unheard of to get about $100K credit limit with a bunch of credit cards. What you do with that after that depends on your own ability to manage your finances and discipline. Good credit history is defined by paying your credit cards on time with at least minimum payment amount (which is way lower than the actual statement amount). Above average pay is $60K+. So you can easily have tons of debt, yet be considered ""low risk"" with good credit history. And that's the most lucrative market for the credit card issuers - people who do not default, but also have debt and pay interest." There are several reasons why credit cards are popular in the US: On the other hand, debit cards do not have any of these going for them.  A debit card doesn't make much money for the bank unless you overdraw or something, so banks don't have incentive to push you to use them as much.  As a result they don't offer rewards other benefits. Some people say the ability to spend more than you have is a downside of a credit card.  But it's really an upside.  The behavior of doing that when it isn't needed is bad, but that's not the card's fault, it's the users'.  You can get a credit card with a very small limit if this is an issue for you. The question I find interesting is why debit cards are more popular in your home country.  I can't think of any advantage they offer besides free cash back.  But most people in the US don't use cash much either.  I have to think in your home country the banks have a different revenue model or perhaps your country isn't as eager to offer tons of easy credit to everyone as the US is. A major reason that I can think of is financial security. Most people have reoccurring costs such as housing, car, medical expenses. If you were to put all you money into dept, and live from check to check, than you could be increasing risk of financial loss. Think about what would happen if one were to default on their mortgage? Risk management plays a huge role in personal finance, and a way of preventing financial loss is to have enough money in an accessible place to pay reoccurring costs in the event that ones situation changes unexpectedly.