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Regularly Use Your Card: If you make use of your credit card regularly and make bill payments on time, chances are higher that the credit card provider will automatically increase your credit limit.
Furnish Latest Income Statement: If you had submitted an income statement at the time of credit card application, the bank will continue to use the same and assume that your income has not changed. Thus, make sure to furnish the latest income statement or payslips to your bank and request for an increase in the credit limit on your card.
Request the Credit Provider: If you drop in a request to the credit card provider to increase the credit card limit, the bank or lending institution may agree to it depending on the reason provided for such request. This can be done through net banking or by visiting the bank personally.
Consider a New Card: A new credit card will often come with a higher credit limit as compared to your current credit card. If you have been making timely payments on your current credit card, you will find it easy to apply and get approval for a new card.
Make Timely Bill Payments: If you have been regular and timely with your credit card bill payments, your credit score is likely to increase and the bank will consider you to be a responsible cardholder. This may result in the bank increasing your credit limit over time.
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Credit utilisation ratio = (Balance due on all credit cards/Total credit granted on all credit cards) x 100
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Minimal Credit Utilisation Ratio: One of the biggest benefits you will surely get from a higher credit limit is a low credit utilisation ratio. This is sure to have a positive impact on your credit score.
Easy Loans: A high credit limit which you may not use fully will make banks and lenders favour you while making loan applications. Thus, getting a loan approval will be far easier with a higher credit limit.
Emergency Needs: A higher credit limit can prove to be a boon during a financial crisis or a medical emergency.
Benefits of Perks: Most credit cards which have higher credit limits come with many perks like airport lounge access, hotel memberships, etc.
Additional Reading: How do credit card companies determine credit limit
Final Thoughts
It’s always a smart idea to opt for a higher credit limit as it can come in handy for multiple uses and in many situations, especially during financial emergencies. Be aware that banks perform due diligence before accepting your request of increasing the credit limit, Therefore, ensure to maintain a clean track record with your credit score and utilisation.FAQs
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How can I get my credit limit increased?