By
definition, credit limit refers to the higher end for purchases through the
Credit Card. This limit is set by the bank or the Credit Card company issuing
the card. When you Apply for a Credit Card as a first time user, the
bank or company usually keeps the limit on the lower end, gradually increasing
it over the course of time per the spending habits of the user. This is done to
ensure that the user doesn’t exploit the card and make inordinately expensive
purchases.
Just
in case, you don’t wish to wait long enough for the bank to extend your
purchase limit; you can follow one or more of the below-mentioned tips to enjoy
a higher card limit, in a comparatively short span of time.
Furnish the Proof of Your Income
In
most cases, card issuing companies rely on the figures of your latest tax
returns. If there has been any significant increase in your income after the
last time you filed your returns, then make sure to furnish proof of salary/
revenue to the company. You can then request them to increase the card limit
accordingly.
Consolidate Your Debts
At
the time of offering the card, the company will take a call on your spending
limit based on your current credit history. Having existing loans to be paid
off shortly may curb your leveraging capacity. Hence, we strongly recommend you
to pay off all the debts possible, and inform the agency about the same. Do
remember that you will be required to present loan closure papers, to enjoy an
increased credit limit.
Apply for a Better Card
By
better we mean to say, a card with higher benefits and consequently increased
credit limit. There may be times when you get lured by a specific card owing to
its low or no annual fee, and other such benefits. However, often such cards
limit the users’ spending capacity. If this is the case with you, get in touch
with the bank and let them know that you do not mind paying a higher annual
fee, if you can gain access to a card with a higher limit.
Use Your Primary Card
In
case you already possess a card with a higher credit limit than that offered by
your current card, feel free to bring this to the notice of your current
issuer. Then go ahead and request for an appropriate increase, and chances are
your wish will be granted. Quite conveniently!
Demonstrate Financial Discipline
Use
your card to make all your purchases, and exhaust the limit every month. Also,
repay the outstanding amount well within the stipulated period. This will help
the issuer understand your financial management skills, and lead them to
believe that you’re capable of handling a higher limit. Eventually, they may
consider increasing your limit.
Remember,
card issuers are fond of the customers who use the card frequently, while still
paying their bills on time.
Use Your Card During Travelling
This
is especially advisable for international travels. However, it holds true for
domestic trips as well. In case, you are off on an extended vacation, convey
your plans to the issuing company and request them for a higher credit limit so
that you may use the card without any restraint. More often than not, the
issuer will be happy to grant your wish! Easy, isn’t it?
Maintain a Favourable Credit Utilization Ratio (CUR)
Credit
Utilisation Ratio or CUR refers to Credit Card usage concerning the maximum
spending limit. For instance, if the credit limit is 1,00,000 and you spend
70,000 in a month, your Credit Utilisation Ratio will be 70%. The CUR will
reflect your spending habits as well as your credit managing ability. A high
CUR indicates that you are consistently in a cash crunch or are a compulsive
spender. None of these help your credit history. Hence, it is advisable that
you maintain a relatively low CUR of about 30%.
Again,
your credit score should always be 750 or above, which can only be maintained
if you avoid glitches like missed payments and defaults. Hence, it is best if
you limit your Credit Card spending and ensure that you do not exceed your
credit limit, under any circumstances.
These
factors will help the issuing authority place their trust in you, leading them
to increase your card limit at the earliest possible.
Now
that you are aware of some of the most promising ways to enjoy a higher credit
limit, we believe you will reap the benefits of your Credit Card to the
fullest. Make sure that you do not overspend, lest you will fall behind on your
bill payments thus giving way to a poor credit score. Hence, opt for a higher
limit only when you are exceedingly sure of your ability to repay the credit
well within time.
Also Read : Get the Most Out of your Credit card
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Secured Loans and Unsecured Loans, visit www.mymoneymantra.com,
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