Be in your limit, I become your best friend, if you cross the limit, I will become your biggest enemy
~ Credit Card
Due to credit card limit, it becomes the responsibility of the cardholder to use the credit card with care. If your expenses cross the credit limit, you have to pay the higher overdraft charges. Later on, inefficiency in paying the higher credit card bill at the time makes the condition worse.
Overdraft charges can be avoided with the higher credit limit. Even the higher credit limit allows you to make high volume purchases.
So, how do you get a credit limit increase? These 11 tips will help you to get your credit card increased.
#1. Use Card For Foreign Travelling
Banks charge a foreign currency markup fee up to 3.5% for every transaction you make outside India. This is a source of income for the banks on the credit cards. Due to this reason, the foreign travelers are special customers for the banks.
If you are a frequent foreign traveler, you are a more valuable customer for the bank as compare to the other customer, so obviously deserves a better limit.
#2. Apply for New Card with Higher Credit Limit
It is the simplest method to increase your credit card limit. Apply for a new credit card with the same or with the other bank. In most of the cases, the new credit card comes with the higher credit limit.
The approval of the new credit card will merely depend on the CIBIL credit score & your present income. With the favor these two terms, you will get an easy approval.
But, if you already have more than 2 or 3 credit card, the application for another credit card, may negatively affect your credit score.
If you are thinking of applying for the new credit card, then you can find your next credit card here 13 Best Credit Card in India.
#3. Requesting For Limit Increase
Request for an increase in the credit card limit is the first most method used by the cardholders. You only have to speak to the customer care service representative and ask for an increase in the credit limit. You may also be able to file a request online.
When you request a credit limit increase, the bank checks your CIBIL score, past track like your credit card bills payment history along with your present monthly income. This is to check your present creditworthiness.
If all goods, you will get easily increment on your credit limit otherwise request will be declined.
You may also like read A Step by Step Guide to Check Your CIBIL Score.
#4. Increase Security Deposit
To increase the credit limit on a secured credit card is as easy as to get a credit card against fixed deposit in India. The credit limit in secured credit card is decided directly as the percentage of the fixed deposit, say 80% of the fixed deposit.
This limit can easily increase by making additional security deposit against the credit card.
#5. Credit Card Upgrade
Ask your bank if you are eligible for the upgrade of your present card to the next level card. The bank allows the card upgrade only to the valuable customers who have good payment history.
Generally, the credit card limit increase with the upgraded card. For surety purpose, you can also make a request for limit increment along with the card upgrade application.
You should also keep in your mind, the annual fee for the upgraded card. You may have to pay some extra money as annual fee as compare to present card. Make a cost-benefit analysis, before taking the final decision.
#6. Use Your Card Frequently
A great way to convince your bank, you need more limit is by using your card regularly and repay it on time. If you use your card once in a while, it seems like you don’t need for an increase in credit limit.
Banks love the customer who spends more money and repays it on time. So spend more & frequently with your credit card to get the easily increase the limit.
But overdraft or full limit utilization will harm your CIBIL credit score badly. The maximum limit utilization should be up to 70% of the credit limit.
#7. Show Your Income Increment
Income is the most dominant factor in deciding the credit limit. Even the income is the first thing bank asked from the applicant on credit card application. The income level of the applicant represents the probability of credit bills repayment.
Higher the income level, higher will be the repayment probability and the applicant will get higher credit limit. This theory also applies at the time of limit increment request.
Whenever you get salary increment, show it to the bank. The bank will increase your credit limit on the basis of your salary increment.
#8. Request Limit Increment Only For Your Best Credit Card
Never request limit increment for all your credit cards. When you request a limit increase, card issuer check the credit report and that inquiry can cause a temporary dip in your CIBIL credit score. This will decrease the chances of getting limit increment.
Instead of this, focus on your best credit card, and make one strong case to one bank, rather than a half-attempt to a number of banks.
#9. Build Your Case, Don’t be Desperate
Never ask the bank for the limit increase saying that you have an emergency and you desperately need money for paying your bills. This type of behavior will indicate, your unstable financial condition and even can raise a question on your account.
In spite that, build your case. Remind your bank that you have been a loyal customer for X years/months and have never missed a payment. If you have a better limit on your other credit cards, let the bank know about it.
This is how can build your case. Strongly you build your case, more will be the chances of the request approval.
You may also like to read 13 Benefits of Credit Card that will save you more than Rs 10000 every year.
#10. Limit Increase Request Denied
Your credit limit increase request may be denied for a few different reasons like your account is too new, you have a low CIBIL score, your income doesn’t allow for the increment or you may don’t pay your credit card bills on time.
So, when your request once denied then don’t make the request again and again. Rather than this, navigate the reason for refusal the request, take time to fix the causes and then try again.
#11. Wait for Automatic Limit Increment
Where nothing works, there only wait can work. Wait for the time when bank reviews your account itself to determine whether you should get a credit limit increase. If you are eligible, you’ll automatically get increased credit limit. So wait for the best to come.
My Final Tip
Firstly ask yourself, why do you want to increase your credit limit? If there is no practical need, then you shouldn’t make a request for the limit increase. Maybe, a higher limit tempts you to spend more and lead you down to financial problems. So it is good to be in the limit that you can pay on time.