How to Increase Credit Card Limit

30 May 2024
4 min read
How to Increase Credit Card Limit
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Are you looking to increase your credit card limit? There are several reasons for you to want a higher spending limit. Maybe you have a big expense coming up later in the month, or you would like to boost your credit score.

In this guide, you will learn how to increase your credit card limit, the benefits of a high card limit, and the manner in which to place a request for an increase in card limit. 

Ways to Increase Your Credit Card Limit

Here are 5 effective tips through which you can increase your credit card limit with smart tips:

  • Timely Payment of Your Dues 

Lenders pay close attention to your payment history. Clear any outstanding dues from the previous months and aim to pay future bills in full before the due date. Timely repayments demonstrate your ability to handle debt responsibly.

  • Manage Credit Utilisation

Try to keep your credit utilisation ratio below 30%. This ratio indicates the extent to which you are utilising your credit limit compared to the maximum limit extended to you.

Suppose your credit card has a maximum limit of ₹10,000, and you have a balance of ₹2,500 on your card, then your credit utilisation ratio will be 25%, which is below 30%. A lower credit utilisation ratio can boost your credit score, thus helping you avail of a higher credit limit.

  • Show Increased Income

Lenders also consider your income. If you have recently received a raise or started a new job with higher pay, it may be a good time to request a limit increase.

Providing proof of a salary hike or other sources of increased income can convince credit card companies of your ability to repay dues on time, potentially leading to a higher credit limit.

  • Reduce Financial Obligations

Consider reducing existing debt obligations, such as home loan EMIs or personal loan payments, before requesting a credit limit increase. Lowering your fixed monthly expenses can improve your chances of securing a higher limit.

  • Get a New Card

If you have a high balance on your current card, transferring it to a new card with a higher limit can lower your debt and boost your credit score. Doing so can improve your chances of qualifying for a limit increase down the line.

Benefits of Increasing Credit Card Limits

The following are some of the benefits you will get by increasing your credit card limit:

  • Boosts Your Credit Score

A higher credit limit positively impacts your credit score if you manage your expenses responsibly without overspending or accumulating heavy debt.

  • Reduces the Need For Multiple Cards

A single credit card with a higher limit can eliminate the need for multiple cards, saving you from additional charges and annual fees. It simplifies managing your finances and helps improve your credit score.

  • Facilitates Loan Approval

A good credit history and score, supported by a higher credit limit, make it easier for you to avail of loans when needed.

  • Provides Emergency Funds

A higher credit card limit serves as a valuable source of emergency funds in case of unexpected health or financial emergencies.

  • Increases Rewards

Banks often view customers with higher credit limits favourably and may offer rewards for maintaining a good payment history.

How Do I Request a Credit Limit Increase on My Credit Card?

Requesting a credit limit increase is usually a simple process. Here are some ways you can ask for a credit limit increase:

  • Request Online

If your credit card issuer allows it, requesting a limit increase online can be quick and straightforward. You might need to provide updated financial information, like details of your income, for consideration.

  • Call Your Issuer

If you prefer talking to someone directly, calling your credit card company is another option. This allows you to ask questions and get clarifications on the process. It might also speed up the request if you need a quick response.

The Bottom Line

Now that you know how to increase your credit card limit, you can enhance your financial flexibility and fulfil your spending requirements.

Remember, a higher credit limit comes with increased debt potential. So it is crucial to use your card responsibly. By exercising caution and making wise financial decisions, you can leverage your increased limit to your advantage while avoiding unnecessary debt burdens.

You may also be interested to know

1.

13 Things You Need to Know About Credit Cards

2.

How to Transfer Money From Credit Card to Bank Account

3.

10 Things to Check in Your Credit Card Statement

4.

How Do Add-on Credit Cards Work?

5.

How to Activate Your Credit Card Online & Offline?
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