Credit Card limit is the spent limit set by the credit card company or bank. Getting a rise in a credit card limit is like getting a promotion or salary hike. Credit card users love to raise credit limit and most of them are looking for ‘How to increase Credit Card Limit?” If you are one of them your search ends here. In this post, we will do an in-depth discussion on credit card limit and methods to increase the credit limit of the credit card.
Increase in credit card limit means more buying power and freedom to spend more money. But, before you opt for credit card limit rise let’s take a look at few important points.
Advantages of increase in credit card limit
- Increase in buying power
The first and most obvious advantage of credit limit raise is an increase in buying power. You can spend more money and purchase products or avail services which were beyond your reach earlier.
- Improvement in your credit score
As limit is increased you will be able to utilize for its maximum potential. This will ultimately help you to improve your credit score.
- Help in case of emergency
The higher limit of credit card helps you in an emergency situation where you have an extra limit at your disposal. However, in order to use it in the emergency, you have to restrict its utilization.
- Reduction in Number of Credit Cards
Due to low limit if you are using numbers of credit cards you can reduce its count. This leads to an extra saving in terms of annual fees of multiple cards. You can also remove the headache of tracking bills of multiple credit cards.
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- Extra Reward points
As your utilization of credit card will go up you are likely to get more reward points. A redemption of additional points brings you extra saving or freebies based on the card you are using.
Disadvantages of increase in credit card limit
- Risk of default
Increase in credit card limit means sending an open invitation to trouble. There are many examples where people have landed in high debt due to excessive use of credit cards. So, if you are opting for higher credit limit make sure to avoid excessive usage of credit card.
- Risk of Theft and misuse
The prevailing risk of theft, misuse, and hacking of such cards bring more trouble to the customer. You have to be cautious while using high limit credit cards.
- Potential Credit Damage
Due to inability to pay money, if you miss credit card payment it will be recorded in your credit history and it will impact your credit score adversely. This impact will reduce your eligibility to avail loan.
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How to Increase Credit Card Limit?
You can increase your credit card limit easily. Here are proven ways to enhance your limit.
Increase your Security Deposit
The first way is a simple and failsafe way to raise your credit card limit. However, you need to place a fixed deposit as an additional security for increasing limit. Based on fixed deposit amount rise in credit limit is given by credit card companies/banks.
Apply for new credit card
Another way to increase limit is by applying for a new credit card with a higher limit. If your credit score is good, then a credit card with higher limit shall be issued to you without any issue.
Ask Customer Care
If your credit history is good company will automatically update your credit limit, if your credit limit is not enhanced automatically you can approach customer care of issuer for enhancing your limit. The customer care executive might ask for the income proof.
Spend wisely
Before going to the issuer for enhancement of limit, make sure that you spent wisely and clear your dues on time. This will improve your credit history and credit score. Improvement in score will surely help you to enhance your credit limit.
Increase limit online by yourself
You can also increase credit card limit by self. Many credit card companies and banks like SBI provide this facility. You need to login to credit card site and click on ‘offers’ or ‘benefits’. Here you will be able to see offer related to credit limit enhancement. You just need to select and click on submit button.
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When you should ask for Credit Card Limit raise?
The best time to apply for credit card limit raise is when you are in a healthy financial situation. The chance of getting approval at that time is very high. Few examples for your reference are given below.
If you have got salary rise
One of the best time to ask for raise in limit is when you have got salary rise. If you are using a credit card since long you must have submitted your old salary proof. This means credit limit was set based on your old income proof. Now you can enhance that just by submitting new salary slip.
If your credit score is increased
You can also opt for credit limit enhancement when your credit score is increased. Your credit score depends on your payment history, credit utilization, saving bank balance and a lot of other factors. If you have scored well in all these your credit score must be good. You can use this improved score to enhance your limit of a credit card.
If you are traveling abroad
Another best time to increase your credit card limit is when you are traveling abroad. It is a time when you actually need a credit card. You can request bank or credit card company for the limit enhancement.
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Credit Card Limit Enhancement – Should You Opt?
Now a million-dollar question that must be popping up in your mind is – Should I opt for credit card limit enhancement or not? I would recommend opting for limit enhancement only if –
- You are a disciplined and cautious buyer.
- Your expenses are generally under control.
- You will be able to clear credit card dues on time in any condition.
If any of above condition is not fulfilled, you should not opt for a higher limit, else you may end up yourself in a vicious circle of debt and credit card dues.
I hope you have got a complete understanding of credit card limit. If you have any further questions/advise/objection, please do not hesitate to write me here. I would love to learn more on this with you.