Credit Card Limit: As a credit card holder, there are several aspects of your credit limit that you should know to use your card responsibly. Let’s know how to increase credit card limit.
Credit Card Limit: Credit cards are a convenient way to manage expenses while building a credit history. Not only this, they also make money easily available when needed. This eliminates the need to carry large amounts of cash. But how much money you can borrow using your credit card depends on your credit limit. As a credit card holder, there are many aspects of your credit limit that you should know to use your card responsibly. Let’s know what these are?
How to increase credit limit
There are several ways in which you can increase your credit limit. Let us see what some of these are:-
- Use credit cards responsibly
- Using your credit card responsibly by maintaining a low CUR and paying bills on time, among other things, can help you make a case for a limit increase.
Ask the issuer to increase the limit
Request a credit limit increase directly from your card issuer. You may need to provide details about your income and employment. If your income has increased significantly since you applied for your current card, submit your current salary slip to the issuer or bank and request them to review your credit limit.
Get a second card with a higher limit
If your current card issuer is unwilling to increase your credit limit, consider getting another credit card with a higher limit. Be cautious about opening multiple new credit card accounts, though, as this can have a negative impact on your credit score.
Demonstrate financial discipline by making timely repayments
A credit card can help you build a credit history. Use your card frequently but responsibly and pay off your balance in full on time. By doing so, you can demonstrate yourself as a disciplined and responsible credit user, potentially causing your issuer to increase your limit over time. Card issuers usually give preference to customers who consistently use their cards for transactions while paying off their balances.
Automatic Increment
Sometimes card issuers review your accounts and automatically increase the credit limit. This is particularly seen in the case of cardholders who regularly make timely payments and manage their credit responsibly.
Benefits of high credit limit
There are many benefits associated with a high credit limit. It increases your purchasing power by allowing you to make high-value purchases without putting a strain on your finances. A high credit limit can also be a safety net during emergencies. For example, you have an emergency medical expense of Rs 150,000 but your card has a maximum limit of Rs 100,000, it can be a challenge to cover the shortfall in funds. However, if your card limit was Rs 200,000, the same situation would be easier to handle, as your credit limit would allow you to cover the entire cost, without any unnecessary financial or mental stress.
At the end
Increasing your credit limit will not only increase your financial flexibility but will also help improve your credit health. However, before increasing the limit, assess your financial situation and ability to service high credit card balances. If you are working on financial discipline and budgeting, avoid increasing your limit right now. Also, if you use your credit card sparingly, increasing the limit may be of little benefit.
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