If you already have a credit card, you may find that you need a greater credit limit if your income and credit card usage increase over time. Banks may provide an increased credit card limit to their active and responsible credit card users as part of their marketing efforts. When it comes to requesting a online credit card limit increase, however, banks are picky.
Increases in credit card limits provide you with more flexibility in managing your spending and are justified when your income and spending capacity rise. Furthermore, while planning a foreign trip, a greater credit card limit comes in handy because it provides additional comfort in meeting higher-than-expected expenses. With a higher credit limit, you can keep your credit utilization ratio low, which is one of the most important elements that affects your credit score. A common rule of thumb is that you should not take out credit that exceeds 30% of your credit limit.
If you do decide to request for a higher credit card limit, here are some recommendations to help you get your credit card limit increased:
1. Get a new credit card with a higher limit: This is the most straightforward choice. Depending on the demographics of the target customer, each card usually has a set credit limit. You can look for a new credit card from a different lender that will suit your needs, or you can apply for a new card from the same lender.
2. Choose an existing card with a higher credit limit: If you have numerous credit cards, it’s important to weigh the benefits of each and choose the one that will benefit you the most if its limit is raised.
Avoid applying for credit card limit increases from all of your existing credit card issuers because this will result in each lender retrieving your credit report, which will lower your credit score by about 5 points. Multiple pulls, on the other hand, indicate desperation for a bigger credit limit, lowering your chances of obtaining more credit.
3. A compelling reason: Before approaching your lender for a credit limit increase, consider why you want to increase your credit card limit. You can’t go to the lender and beg for a higher credit limit. You must demonstrate that you have a compelling argument for a higher credit card limit. The following are some compelling reasons:
- You always make a larger payment than the minimum balance owed.
- Your earnings have grown.
- You pay your credit card bill on time every month.
- You have never used up more than 30% of your credit limit.
4. Don’t be in a hurry: This means you shouldn’t ask for a raise in your limit too quickly. Every six months, most credit card companies evaluate your credit history. However, this in no way implies that 6 months is the ideal time to request a credit card limit increase from your lender. You will almost certainly get rejected if you do so.
Instead, wait at least 12 months before requesting a limit increase, which should always be accompanied by compelling reasons.
5. Don’t Be Greedy: Whether or not your credit or debit card limit is extended is a choice that will be made based on your credit history, credit limit requirements, and current income. Even if your credit history is excellent, asking for a 100 percent increase is not a good idea.
Instead, stay within a 25% range, as a request for a higher credit card limit may be turned down by lenders.
6. Balance Transfer: You have the option of transferring your balance from one card to another. It is a profitable alternative because lenders provide a discount on the interest rate for transferred balances, minimizing your interest burden. Some lenders additionally provide a no-interest period.
Lenders can gain extra money from the interest they charge by transferring balances that would otherwise go to another lender. A request for a credit limit increase via balance transfer is more likely to be accepted than a standard request. However, your good credit history with that lender will still be a key consideration in obtaining acceptance.
Remember that increasing your credit limit solely to be able to spend more is never a good idea. A higher credit limit does not imply a higher net worth. It’s best to be patient and wait for your credit limit to be increased naturally by the lender. You should be able to acquire an auto raise from your best credit cards in India issuer on a regular basis if you have been doing well and are in good standing with the lender.