Credit card usage has increased manifold in the past few years. One of the reasons is the many benefits in forms of rewards and credit facilities the user can derive from it. Financial institutions offer credit cards depending on various factors, such as an individual’s income, credit score, job status, etc.
After considering and assessing these factors, the financial institution offers a credit card variant in tune with the eligibility of the lender in question. These types vary based on the credit card limit, national/international validity, and the kind of rewards one will receive upon using it. However, it’s the credit limit which is considered as the most standout feature of such a card.
A credit card user is unable to increase the credit limit as per their discretion unless they are offered with the same. Such an offer depends on the issuer’s assessment of the user’s eligibility as per the credit score, previous usage, etc. Before delving into the tips to increase the credit limit, you should be aware of the traditional and prevalent ways in which to do so.
Ways in which credit limit can be increased
- Apply for a higher credit limit: One of the two ways in which you can avail a higher limit for your credit limit is by applying it to your respective issuer. It is wise to apply for a surge after at least 6 months of usage. It provides the issuer with considerable data on your credit history and other factors to examine whether you are eligible for a greater limit.
- Let the issuer increase: In cases, the issuer increases the credit card limit themselves or issue you a new credit card which has a higher limit and other bonus features. A creditworthy and loyal customer will be automatically offered such features in lieu with a strong track record.
Tips to increase the credit limit
You can follow these steps to wisely use your credit card and increase your credit limit –
- Do not apply for multiple limit increases at once: If you use multiple credit cards, it is wise not to apply for a surge in credit card limit for every card at the same time; because whenever you apply for a hike, the respective issuer pulls your credit report from CIBIL’s database. It slightly affects your credit score, which is negligible in case only one issuer enquiries. However, when multiple issuers make multiple enquiries it significantly drops your score. On top of that, issuers can view the current enquiries in your name which further reflects you as a credit hungry individual and increases chances of rejection.
- Make timely repayments: The best way to be considered as a creditworthy user is by making timely repayments on credit card bills. It will reflect on you as a responsible user, improve your credit score and consequently make a better impression on the issuer. It will also help if you repay more than the minimum amount. Also, when you have an excellent credit score, you can enjoy availing feature-rich credit cards such as the Bajaj Finserv RBL Bank SuperCard. Provided by Bajaj Finserv in association with RBL Bank, it offers numerous benefits such as interest-free cash withdrawals, personal loans against the credit card, etc.
You can also enjoy pre-approved offers on these credit cards as well as on numerous other financial products such as home loans, personal loans, business loans, etc. These offers help make the process of availing financial products simpler and easier. You can check your pre-approved offer by submitting your name and mobile number on their website.
- Credit utilisation ratio: Another tip by which you can ensure a higher credit limit is by wisely utilising it. Therefore, it is always wise to use only 50-60% of your credit card limit. Your chances of approval increases if you tend to use only a mere 30% of the given limit.
Apart from these, you can also apply for a higher limit when you have recently had an increase in your income. If not, you can follow the above-mentioned tips to increase your credit limit and make higher spends.
Also, when you have a higher credit card limit, you can customise your expenditures to ensure you maintain a good credit utilisation ratio. Also, keep a regular check on your credit score to see how you are performing as a user before you go on to apply for it or other advances.