In India, credit cards are one of the most popular forms of plastic currency. Various financial institutions issue these cards and offer several advantages over hard cash or debit cards. As a credit card holder, you can use it to purchase goods or services on credit and repay later.
Every financial institution pre-sets a credit card limit which is the maximum amount a cardholder can borrow using that particular financial tool. Lenders review various parameters to decide how much a cardholder can borrow and repay to ascertain a specific credit limit. Such factors include an applicant’s income, credit score, and current financial obligations.
As one continues to use the card, one gets opportunities to increase its credit limit. It can bring a wide range of credit card benefits as users enjoy a substantial sum to fund their necessities.
How to increase your credit cards’ limit?
If you have a credit card or are planning to avail one, here are a few ways you must know to increase your credit limit.
Automatic credit limit increase from the lender – Many financial institutions automatically increases your credit card limit as you keep using it. Typically, they conduct a review on their customers’ financial profile every 6 to 12 months. If you maintain a string of timely repayments of the credit, you can enjoy an automatic limit hike on your credit card.
Maximize your card’s usage – Financial institutions are more likely to increase a credit cards’ limit if you frequently use it to pay for your purchases. You should also remember to make timely repayments.
Maximizing your credit card’s usage and making a habit of timely repayments show that you will utilize the increased limit correctly and can handle your finances responsibly. It also earns you more benefits and rewards.
Maintain a good credit score – Your credit score is one of the most critical parameters that show your creditworthiness. It is a 3-digit number, ranging from 300 to 900. A credit score of 750 or higher will compel lenders to offer you a higher limit.
Use it to pay recurring bills, like electricity, telephone bills, utilities, etc., preferably with ECS. Routine usage as well as repayments will help you increase your CIBIL score quickly and make your car provider offer you an automatic credit limit increase on your card.
Ask for a limit increase – You can request your financial institution to increase your credit cards’ limit if they have not reviewed your profile for a while. Contact their relationship manager or customer service to send a formal request for a larger sum of credit.
How to maximize chances of your credit card’s limit increase?
There are some important financial habits that you should make to increase the probability of a credit limit increase.
- Be a loyal customer – Your association with the financial institution can impact the chances of an automatic credit increase. Lenders prefer to retain loyal customers and thereby offer them with an increased credit limit.
- Pay more than the minimum balance – Paying more than the minimum balance will prove that you are responsible with your finances and are capable of paying your dues.
- Limit credit utilization to within 50% – The chances of automatic credit card limit decrease if the financial institution considers you as a heavily credit-dependent borrower. Ideally, you should utilize below 50% of the available credit limit to avoid this issue.
When to increase your credit cards’ limit?
You can request a lender to increase your credit cards’ limit in the following situations –
- If your income has scaled – An increased income means you can cover higher expenses without affecting your credit limit utilization. It is an ideal scenario when you can ask for a credit card limit increase.
- Before a significant expense – You can request a credit card limit increase if you require immediate funds. Occasions like festivals, marriage, etc. require substantial funds. You can ask your financial institution to increase the limit before planning such events.
There are various types of cards that offer a high line of credit along with a host of credit card benefits and rewards. For example, Bajaj Finserv RBL Bank Super Card comes with a sizable credit card limit to take care of all your financial needs. It also has several industry-first features like cash withdrawals from ATM’s, emergency loan and easy EMI’s.
Bajaj Finserv provides pre-approval offers as well for credit cards, business loans, home loans, personal loans, and a plethora of financial products. Such offers save more time with a simplified process of availing credit. You can find your pre-approval offer by sharing some essential details online.
A higher credit limit provides you with better financial security, helps you avoid penalty fees, or even allows you to consolidate other debts. Following the tips mentioned above can help you increase your chances to enjoy a higher credit card limit.