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Key Tips to Increase Your Credit Card Limit

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Key Tips to Increase Your Credit Card Limit

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If you own a credit card, it obviously comes with a credit limit. You might find yourself frequently spending most or all of it; there may be one question that’s been on your mind for a while now — How do I increase my credit limit? 

In case you have wondered this at one point or another, there’s good news for you. You can increase your credit card limit if you wish to.

1. Place a request for an increase in the limit on your existing card 

One of the easiest ways to increase your credit card limit is to place a formal request for the same with the issuing bank. If you do place such a request, the bank will take into account various factors like your credit score, your repayment history and your income before deciding whether you are eligible for an increase in your credit limit.

That said, it also helps you have a long-standing relationship with the bank, because they will have historical data to rely on. So, if you check all these boxes, it doesn’t hurt to first directly reach out to your bank and place a request for a higher credit limit.

2. Or, apply for a new credit card instead.

From time to time, many banks and financial institutions have offers and deals on their credit cards. You may even get calls from the sales teams at different banks, informing you that you are eligible for their credit cards. One of the best ways to increase your credit limit is to simply take advantage of these offers and get a new credit card that has a higher credit limit than your existing card.

3. Check if your bank offers an annual increase

Occasionally, some banks may issue credit cards that have a clause for an annual increase in the credit limit. Of course, this will depend on various factors. You should have paid your existing dues on time. And you should have a healthy credit history. If you meet the criteria set by the bank, you may be eligible for an annual increase in your credit card limit. 

Check with your issuing bank if you qualify for this feature, and if you do not need the increased credit limit right away, make sure you avail this benefit. In most cases, a higher credit limit also comes with better credit card rewards. Importantly, you can never predict when a higher credit limit may be useful. 

4. Offer proof of an increase in your income

Another easy technique with which you can increase your credit card limit is by offering your bank some incentive to permit the higher credit limit. A proof of increase in income is one of your best bets in this context because it shows the bank that you can financially sustain a higher liability. 

Your bank may not be aware of a pay hike you received at work or about a new job that now offers you higher pay. Letting your bank know of this, could 

5. Pay your credit card bills on time

Lastly, make sure you pay your credit card dues on time. This is because prompt payment will have a positive impact on your credit score and your credit history. And irrespective of which method you choose to request for an increase on your current credit card or to get a new card, your credit score plays an important role in determining your credit limit.

In case of a poor credit score, your existing banker may not be willing to increase your credit limit. Alternatively, you may not qualify for any new credit card either, making it hard to obtain a higher overall spending limit.  

Summing up

These ideas should help you understand how to increase your credit card limit. If you do increase the limit, ensure that you use the additional limit prudently. As experts recommend, it helps to retain a credit utilization ratio around 30%. This way, your credit score will remain in the green zone, making it easier for you to obtain more credit facilities in the future, if you need to. 

Frequently Asked Questions (FAQs)

1) Why does a credit card limit matter?

The credit card limit matters because it is the maximum amount you can spend on your card. Also, the higher the credit limit, the more your spending capacity. A higher credit card limit also makes it easy for you to lower your credit utilization ratio, which, in turn, positively impacts your credit score. 

2) What is the maximum credit card limit?

The maximum credit card limit is the highest amount that you can spend on your credit card. You cannot spend more than the maximum limit specified on your credit card. That said, it is always advisable to limit your credit utilization to around 30% of your credit limit. So, for instance, if your credit card limit is Rs. 1 lakh, you can try and keep your credit usage in the range of ₹30,000 or so. 

3)What are the tips to increase credit card limits?

If you are wondering how to increase your credit card limit, there are many tips that you can use to achieve this purpose. Some of the top ideas that work include requesting for an increase in the limit on your existing card, applying for a new card, and improving your credit score by paying your bills on time. 

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