Credit Card limit is revised gradually over a period of time according to your card usage habit. Read on to know what Credit Card companies or banks consider while raising the card limit.
Credit limit basically stands for the purchase limit set by a Credit Card company or a bank on your credit card. When you apply for a Credit Card for the first time, then usually you are allowed a low limit, which is enhanced gradually over a period of time according to your card usage habit.
However, if you do not want to wait till the card company raises your credit limit, then you can follow some simple steps to get your card limit increased in a short span of time.
Present Your Income Proof
Card issuers usually check your income based on your last return filed. If your income has increased considerably after your last tax filing, then you can present your present salary slip to the card company to request them to review the card limit.
Cut Down Your Liabilities And Inform The Card Issuer
The card issuer also looks at your Credit Score and existing credit level. If you have existing loans in your name which is expected to be repaid completely in the next few months, it lowers your leveraging capacity too. So, close your existing loans as much as possible and thereafter present the loan closure papers to the card issuer to increase the card limit by a significant level.
Your Another Card With High Limits Can Come To Your Help
Sometimes the card issuer may adopt a hawkish stance when offering a card to a customer for the first time. If you hold a Credit Card of any other company that offers a higher limit, then you can request for an increase in the limit of the new card based on your existing card with a higher limit.
Exhibit Financial Discipline – Repay On Time
You can use the new card to exhaust the limit often and repay the outstanding amount before the due date to show a high degree of financial discipline. It would show your credit card issuer that you can handle the higher limit with financial discipline and it may consider increasing your card limit after a few months.
Card issuers usually look for customers who transact more with the card, use it for EMIs and at the same time repay the outstanding amount and EMIs on time.
Use Your Card When You Travel Abroad
Credit Card companies like customers who transact using their card during their foreign travel. If you are planning to go on a foreign trip, then report this to your card company and request to enhance the limit so that you can make more transaction using the card. Often card companies agree to such requests and increase the card limit.
Apply For A Higher-Level Card
Sometimes you may hold a card which is given to first-time users with very basic facilities available on it. Such cards come with a low annual fee and low limits despite how high your transactions are. If you request your card company to upgrade your card to a higher level and if you are ready to pay a higher joining and annual fee, then there is a great chance that your credit limit will be enhanced when you get the new card.
Things To Keep In Mind
There are lots of factors which are considered when a Credit Card is issued to you. Your credit profile, spending habit, income level are some important points which are usually checked by the card issuer when deciding about the credit limit. Credit Card companies also consider income after EMIs/debt repayment when offering the card limit.
If you are a new credit card user, then you should wait for some time before requesting for enhancing the card limit because looking at your transaction pattern, the card company may itself increase the limit. A higher limit is a good option to keep your credit utilization ratio at a lower level, but at the same time, it may prompt you to spend more money. So, do check your spending limit when you plan to increase the credit card limit.