A credit card is among those financial tools that offer financial aid in times of need. Owing a credit card gives security against emergencies that might arise when you need cash or surplus funds. Since credit cards are advantageous, there are specific limits to their usage. However, they comprise a predefined credit limit, meaning there is a restriction on the amount you can spend using your credit card. You can increase the credit limit if needed.
A free CIBIL score check is necessary to ensure your creditworthiness and if your score is eligible for a credit limit increase. You download the CIBIL score app on your smartphone to conveniently check your score.
Let’s dive into how you can increase your credit limit.
How to Increase Your Credit Limit?
Although credit limits are at lending institutions’ discretion, there are numerous ways to increase your credit limit, whether the raise is on your current or new credit card. If you properly handle your credit card, chances are high that your credit limit will be increased. You can follow the measures stated below to increase the limit on your credit card depending on certain needs:
Apply for an Additional Credit Card
An easy to increase your credit limit is to get more than one credit card. Using this way cautiously is necessary because you wouldn’t want to get trapped in debt. Many people use this method because it is hassle-free compared to raising your credit limit on your current credit card. Having numerous credit cards aids you in spreading your debt several credit cards with multiple payment cycles and making on-time repayments effortlessly. For instance, a credit of yours may have a repayment timeline at the month’s end, and another credit card has a repayment timely in the middle of the next month. If you fall short of it, it will give you sufficient time between repayment dates to gather money for repayment.
Clear Your Current Loans and Dues on Time
An ideal way to boost your credit limit is to pay credit card bills timely. Payment defaults hamper your credit score. It is advisable to pay your bills within the payment deadline, which will pinpoint your repayment capability to the bank or other financial institution and gain their confidence and trust. In addition to clearing your dues, it is advisable to repay your personal or home loans before you request your bank to raise your credit limit. Banking and financial institutions check your existing debt before approving your credit limit increment request. More debt indicates less chance of being eligible for a high credit limit.
Show Your Proof of Income
Income is a significant factor that determines the limit of your credit card. Submitting your updated proof of income aids you in getting your desired credit limit from banks and other financial institutions. In many scenarios, banks and other financial institutions need to go out of their respective ways to hike limits on credit cards for their current customers. Submitting your payslips, demonstrating your proof of income, and updating your details with the bank will boost your opportunity to get approved for high credit limits.
Don’t Max Out the Limit on Your Credit Card
It is advisable not to max out the credit limit on your credit card and use it wisely. Spending approximately 30% to 40% of the credit limit is advisable because low credit usage depicts that you do not depend on the credit card to manage your expenditures. Spending less will let you clear your dues effortlessly within the due date and increase the limit on your credit card.
Check Offers from the Lender
A good credit history will help you in achieving your goal. Therefore, maintain a good credit score and report if you want to increase the limit on your credit card. A free CIBIL score check on the official websites of credit bureaus or the CIBIL score app will help you be eligible for others from your lender. If you are a loyal customer of your lenders with a good credit history, you will regularly receive offers from your lender to raise your credit limit. A few lenders may offer a yearly hike in credit limit if you pay your credit card bills within the payment deadline. Even when your lender offers high credit limits, you’ll have to submit documents like income proof and others so that your lender processes your request.
Conclusion
There is no doubt in the fact that a high credit limit makes life easier! Nevertheless, with proper caution, you can avoid debt where you spend more than you can repay. By making financially sound decisions and checking your credit score, you can prevent falling into unpleasant situations. You can opt for a free CIBIL score check to know about your score and report before requesting a hike in limit. Credit scores are an important factor that banks and financial establishments consider before raising your credit limit. You can also utilize the CIBIL score app to check your scores easily. If you pay your credit card bills on time, judiciously use the limit on your credit card, and update your existing credit card to a better one, you can effortlessly increase your credit limit.
