10 Tips To Increase Your Credit Card Limit In India

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Credit limit has always been a constraint, hasn’t it? Every single time you want to buy something or you need that extra money, but you don’t have it because of the term “credit limit.” So, what can you do to increase it? Well, we here in this article we have listed out 10 ways to increase your credit card limit in India.

Do you want to know how you can increase your credit limit? Firstly, you need to ask yourself, why do you want to increase your credit limit? In case if it is to but something you can’t afford, then do it.

The credit card limit indicates the amount you are allowed to use with the consult of your issuer. To get your credit limit increase request approved from the bank, you need to show them that you use your credit responsibly.

10 Tips To Increase Your Credit Card Limit In India

1. Improving credit score

A credit score tells about the borrower’s repayment capabilities according to how he/she had managed his/her credit in the past. So, always try to repay credit as soon as possible to maintain a good record.

The credit score ranges from 300 to 900. It can be higher or lower according to how long do you take to repay the credit you took from the bank earlier.

Banks and financers check your credit score before approving a higher credit card limit because that shows what kind of borrower you are. You will need a credit score somewhere between 650-750 suffices to get a credit card. So, this is the least you must maintain and try to increase it continuously.

A higher credit score can give one a higher credit card limit.

Tip: Clearing outstanding debt, paying bills, and EMIs on time can help you increase your credit score because of the reason mentioned above.

Also Read: 10 Ways to Improve your Credit Score

2. A low credit utilization ratio

Your credit utilization ratio shows the amount of credit one uses as part of his/her credit limit. It may sound contradictory, but to increase your credit card limit, you need to keep your total credit utilization ratio quite low. The lower it is, the better it will be. One should take credit only and when it is required and for the expenses that he/she is not able to meet with a regular salary. This tells issuers that you are not dependent on credit for your day to day expenses, have enough income portraying a good image of you as a borrower.

3. Using card regularly and making payments on time

If you are a regular credit card user, you become more of a trust-able customer to the issuer because of the regular transactions (deposit and withdrawal of money) you are doing and hence your request for an increased limit will carry more importance because gaining the trust of the financier is the most important aspect for getting card limit increased.

In terms of repayment, you win your financier’s trust when you always clear your dues in a timely manner.

Since your issuer is now assured of payment, you have a better chance of obtaining an enhanced credit limit.

4. Requesting for a credit limit enhancement 

In case you are not automatically picked for a credit card limit increase by your financier, you can personally approach them and request them to increase your credit card limit.

You can also file a request online requesting the same. After you make the request, the bank checks your CIBIL score, past records including credit card bills, your transaction history, and your salary, and if all this shows that you don’t credit hungry or have enough income, you will most probably get an increase in your credit card limit.

Precaution: Remember frequently asking for the increase may cause your application to be rejected, and after that, you would end up waiting for many more months you can apply.

5. Showing income sources and income increment

Whether you are approaching your manager personally or are looking for a credit limit enhancement, proof of income sources, additional income, and income increment will act in your favor by gaining the faith of financier.

6. Applying for a new card with higher credit card limit

The simplest way to increase the credit card limit is by applying for a new card with a higher credit card limit.

When one applies for a new credit card, in most cases, the card issuer or the bank gives him/her a higher credit card limit acting in favor of him/her.

Since the acceptance of your application depends on your CIBIL score and your salary, make sure to maintain a good position on both the parameters to get your credit limit increased.

Precaution: If you already have more than two credit cards, this strategy will not work for you because applying again for another credit card may negatively affect your credit score and also portray your image badly.

7. Use your credit card to travel abroad

Foreign travelers are a special segment of customers for the banks because of the income generated from the foreign currency markup fee is 3.5% for every credit transaction made by the person there.

So, if you are a frequent traveler, make use of your credit card for all your expenses(from food to shopping to travel) there to get the maximum benefit out of that visit to your credit card limit.

It will automatically make you a more trustable customer for the bank (issuing authority), demonstrating the case for a higher credit limit and making your case strong.

8. Increase your fixed deposit

It is the easiest way you can follow to increase your credit limit. This strategy will work only for those who have a secured card (a card issued against a fixed deposit).

The credit limit of your secured credit is decided directly as a part of the percentage of the secured deposit.

For example, 70%of your fixed deposit

Tip: Try to get a secured credit card whenever you get one.

If your CIBIL score is poor or your payment history is not good, increasing your FD amount could influence the banks of your creditworthiness.

9. Ask for a credit card upgrade

In general, the credit card limit increases once you upgrade your credit card. This is not universal.

So, ask your bank if you have a good enough status or record for an upgrade of your existing card.

If you have a good payment history, getting an upgrade from the issuing authority, shouldn’t be a problem in general.

Precaution: You should keep in mind that the annual fee for the upgraded card might be higher than your current credit card.

10. Requesting limit increase only for your best credit card

Try to get the maximum benefit out of your best card. Here best card means your card that had good status in the past. If you have multiple cards, never request a limit increase for all of the cards. Don’t expect that if you apply for a credit limit increase on all your cards, all will get approved, and if you are doing so, you’re profoundly wrong.

Instead, just pick one best credit card and apply for credit limit increment as when you request for an increase in your credit card limit, the bank will check your credit history to let know of your creditworthiness, and in that process, the inquiry will be noted on your credit report. It will temporarily dip your CIBIL credit score. So, more the inquiries, the more will be the dip in credit score.

Therefore, focus on your best card and make one strong case.

Now, whenever you request a credit limit increase, understand that a higher limit would always tempt you to spend more and then lead you down to a big debt trap. So, never change your spending habits because of the increased credit card limit as it is just a false sense of increased wealth.

Always keep your credit utilization ratio under 30% and follow the guidelines mentioned above to go a long way and maintain a healthy credit score.

Recommended: 10 Best Government Business Loan Schemes For MSMES And Startups

I hope the above steps will help you to increase your credit card limit in India. But if you have any doubts or questions regarding the credit card limit then feel free to ask them in the comment section.

Sushma Singh

Sushma is a full-time blogger and financial expert. Join Sushma and 10,000 monthly readers here to learn how to save and invest your money wisely.

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