While applying for a credit card, one of the important eligibility criteria is income level. Every credit card has a different bracket of income level specified based on the benefits and offers of the credit card. Hence, salary is a very important factor while credit limit is decided.
An applicant with a higher salary will be eligible for a credit card with better features, discounts, and offers. However, salary is just one of the factors that decide the credit limit of an individual.
Can an applicant have a lower credit limit despite a higher salary?
Surprisingly, that is very much possible. As stated above, salary is just one of the factors in deciding your credit limit. Your credit score plays a bigger and more important role in deciding the credit limit. If you have a low credit score, how much your salary is, your credit limit is going to be low. A lower credit score with a higher salary means poor financial discipline on part of the applicant and hence the lender will not be comfortable setting a high credit limit.
How can you make sure you get a higher credit limit with your existing salary?
- Use your salary well to pay bills/dues on time. Reminders help a lot to pay bills on time and hence maintain financial discipline and your credit score.
- Do not spend more than you can pay. Stay within your salary limits and assess your expenses regularly.
- Remember to update the bank of your salary raise. Make sure you let your bank know about your new salary which might make you eligible for a card with a higher credit limit.