As per RBI, there were around 50.3 million active credit cards in India in July 2019. The sharp rise in the number of credit card users can be accredited to the several benefits and facilities now offered by financers on these cards. For instance, for some credit card users, the substantial credit card limits offered by leading financers compel them to avail new cards.
To elaborate, a credit card comes with a pre-specified credit amount offered by the card issuer for making purchases. For instance, if a credit card comes with a credit limit of Rs.1 lakh, cardholders cannot make transactions or purchases exceeding this limit. In fact, an individual’s credit card limit is determined by keeping into consideration several factors and the applicant’s eligibility.
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Factors that determine credit card limit
The following indicates the factors that are taken into consideration –
- Applicants’ age.
- Applicants’ credit history.
- CIBIL score.
- Annual income.
- Their existing debt.
- Status of employment.
Subsequently, applicants with a regular source of income, healthy CIBIL score, and credit history are more likely to secure a credit card with a substantial credit limit. Conversely, first-time credit card applicants or those without any credit history would be offered a credit card with a comparatively lower limit. This is usually done as a measure against risk on the part of credit card issuers after considering the applicants’ creditworthiness.
Nevertheless, first-time card applicants can opt for options like RBL bank credit cards to make the most of the other offerings that come with such cards. For instance, such cards extend benefits like interest-free cash withdrawal through ATM for up to 50 days. Additionally, card users can avail of emergency credit against their available cash limit as well.
Conversely, it must be noted that credit card limits and available cash limits are not the same. The first is the maximum limit up to which card users can spend using the credit card for online or POS transactions. On the other hand, the available cash limit is the amount of cash that a card user can withdraw with the credit card. Note that the cash limit is part of the total available credit amount.
Consequently, users can restore their available credit limit to its initial value by repaying their credit card bills within the billing cycle. However, to increase one’s credit card limit cardholders have to follow some ways.
Ways to increase credit card limit
An increase in the card’s limit would increase cardholders’ purchasing power and would allow them to make essential transactions with greater ease.
Consequently, by following these steps, cardholders can increase credit card limits significantly –
Frequent transactions and timely payment
Frequent credit card transactions help to build a credit history. Eventually, repaying them on time would lay a positive impact on the same. Maintaining a positive record will act in favour of cardholders and would enhance their scope of increasing their respective credit card limit and avail beneficial features on feature-rich cards offered by top financers.
Apply for a new card
One of the most effective tips to increase credit card limit and make higher spending is to apply for a new card with a higher limit. This way, they would not only increase their purchasing power but would also be able to improve their credit score subsequently.
Approach top credit card providers
Financers like Bajaj Finserv automatically offer individuals with above-par credit card limit if they have a healthy credit score around or above 750. They further extend pre-approved offers on financial products like credit cards, business loans, home loans, loans against the property, personal loans, etc. Check your pre-approved offer by offering details like name and contact information.
Regardless, cardholders must make it a point to figure out the circumstances under which they are entitled to request an increase in their credit limit.
For example –
- The account in question has been open for over 3 months.
- It is an unsecured credit account.
- The limit has not undergone an increase or decrease in the last 6 months.
Therefore, by following these steps, individuals would be deemed eligible to extend their credit limit. However, the ultimate decision rests with the credit card issuer. Hence, in the event, they fail to extend their card limit; they can learn how to redeem their credit card reward points and manage their additional transactions accordingly.
Lastly, to make the most of one’s credit card limits, individuals should opt for sound financial management strategies. Regardless, if they still want to extend cards’ limit by opting for ways that are most suitable for them. Refer to leading card issuers and cards such as the Bajaj Finserv RBL Bank SuperCard with a healthy CIBIL score to enjoy the multiple benefits offered.