The Indian financial market has seen a boom in credit card usage in the last decade with an ever-increasing number of people who use plastic money instead of cash. Today, there are more than 36.2 million credit cards in circulation.
Credit cards offer various advantages over hard money or plastic alternatives. The convenience to buy with credit and pay for it later, numerous loyalty programs, entice many to use it as their default mode of payment.
These cards come with pre-set credit limits, that is, a limitation to the total amount of credit which an individual can use with each specific card or account, in case there are multiple cards.
You will enjoy various benefits if you have a higher credit card limit. It decreases your credit utilisation ratio, help you accumulate more reward points that can be redeemed to earn gifts, cash-backs, discounts, etc. and can even help to tackle an emergency with the substantial amount of available funds.
So, let’s take a look at how to increase your credit card limit to help you utilise the financial tool to its fullest extent.
- Keep your credit utilisation ratio below 50% – Credit utilisation ratio is the ratio of the funds you borrow money from your credit card account and its maximum limit. It plays a crucial role in determining your creditworthiness. If you regularly spend more than 50% or 60% of your available credit, lenders will consider you as credit-hungry.Ideally, you should maintain a 30% to 40% credit utilisation ratio at all times. You will portray yourself as someone who is responsible with his finances. Lenders will automatically increase your cards limit if you maintain this recommended limit for some time.
- Always pay the total due amount – Another way of how to increase your credit card limit is to make a habit to pay your due amount in full at every billing cycle. Financial institutions review your credit history periodically to find out how you are handling your money. If you create a history of timely, full repayments, they will consider you as a credible borrower and increase your credit limit.
- Improve your CIBIL score – Every financial institution checks your CIBIL score before lending you credit. Similarly, a higher CIBIL score increases the chances of getting a better credit card limit. CIBIL score is a numerical representation of your financial history. Pay your monthly dues in time, stay below the recommended credit utilisation ratio, and pay-off your existing debts to improve your CIBIL score and become more eligible for a higher credit card limit.
- Channel all your transactions through one credit card – Make monthly payments like utility bills, EMIs, and other essential expenses through one single credit card. Regular transactions and repayments will make your lender consider you as a responsible candidate for a higher credit limit.
If you utilise only one card for regular payments, you will also accumulate more reward points. Cards like Bajaj Finserv RBL Bank SuperCard have reward programs that offer you 1 reward point for every Rs. 100 you spend on everyday purchases and 2 points for every Rs. 200 spent online. Use the card to pay your monthly bills and EMIs and collect a lot of points which you can later redeem for various offers. The SuperCard also has many other industry-first benefits like 50 days interest-free cash withdrawal from ATMs, easy EMI conversion, etc.
Additionally, Bajaj Finserv brings you pre-approved offers for credit cards, personal loans, home loans, business loans, and a range of other financial products and services. Such offers not only simplify the process of financing, but it also helps you save a considerable amount of time.
You only have to provide some necessary details online to check your pre-approved offer.
- Increase your income – Earning potential is one of the most dominant considerations to determine your credit limit. If your income has increased recently, show it to your financial institution to raise your credit card’s limit. It is a guaranteed way if you are looking for how to increase your credit card limit. Credit card companies review a borrower’s profile every 6 months or so to judge their creditworthiness. If they see you as a suitable candidate, they will automatically increase your credit limit unless you request for it first. Various financial institutions accept online and offline applications, like an application through RBL Credit Card Customer Care as a request to increase one’s credit limit.
Follow these tips, to increase your credit limit during the next revision period. Utilize your credit card wisely, make timely payments and stay within the utilization ratio.
Read Also :Â Netgear Orbi Mesh Wi-Fi router Reviewed