Entire India is in the middle of a festive season with many credit cardholders wanting to up their credit limit to ensure multiple purchases don’t let them max out their limit. If you too have this issue and have no idea how to increase your credit limit, then use these tips to get started and be a smart credit card user.
Everything to know about credit card limit
The credit card limit is the maximum usage limit set by your credit card company which can be different from user to user on a case-by-case basis. In other words, it is the maximum amount that you can spend using your credit card – whether it’s a single big purchase or multiple small-ticket purchase amounts. The credit limit varies as per the credit card you use and your eligibility.
How to increase your credit card limit?
Improve your credit score
Your credit card limit usually depends upon your credit score and multiple other factors, you must be wary of the same. It is one of the key factors that can help you boost your credit limit. The credit score mirrors your credit card usage performance and determines your total creditworthiness. For instance, if you never went past your due date or defaulted on paying your EMIs, then it would be easier for you to increase your credit limit. So, one of the easiest ways to improve your credit score is by using a credit card sensibly. Use your credit card online or offline and pay your monthly statement amount before or by the due date to show the credit card bureau that you use your credit card often and pay the bills on time. In short, this is showing that you can easily manage your debt.
Credit card utilization
The credit utilization ratio is the measurement of the credit limit you use against the maximum limit that is allocated to you. It is always recommended to keep your credit utilization at less than 50% of the available limit. Having higher utilization can harm your credit score. Your low card utilization would suggest that you do not ask for too much credit to manage your expenses. A low credit card utilization helps boost your credit score, which in turn, helps you get an increased credit limit.
With the upcoming festive season, followed by promotions and bonuses, a lot of people have a change in their income status. The new earning potential and the ability to repay your pending dues on time are important considerations many credit card companies need while evaluating your credit card limit. So, make sure to submit proof of a change in income to your credit card company to get your credit limit increased.
Reduce multiple credit cards or loans
When you request a credit limit increase, you must pay off any existing, prolonged debt. If you have dues from previous months, make sure to pay them off. If you have open balances on multiple cards, you can consolidate debt and make regular, single payments for some time, before requesting a credit limit increase. This would include loans on cars, homes, personal loans, and other credit card bills. In short, reduce your financial obligations and get rid of fixed monthly dues before asking for an increase in the credit limit.
Apply for a new credit card online
If you have been paying your monthly bills diligently and don’t have multiple credit cards open, then one of the easiest ways to get a higher credit limit is to apply for a new credit card online. For instance, with IndusInd Bank, you can apply for a new card for instant approval online. With a 100% online application process, you can easily get your credit card delivered within 48 hours, and you can get avail yourself of the ongoing no-joining fee and lifetime free credit cards offer from them!
So, what are you waiting for? Get cracking this festive season and get a credit card online!