A credit card is a necessity of the modern world. It allows you to go completely cashless, whether you’re paying for dinner or making the down payment for your car. An integral part of every credit card is its credit limit. To put it in simple terms, the credit limit of any credit card is the maximum amount of money that you can borrow using the best credit cards.
The lender determines the credit limit — be it a bank or a financial institution. The lenders usually look at several parameters to determine the ideal credit limit for each applicant. They look at your credit score, repayment history, existing debts, and your income to finally decide on a credit limit.
However, a common problem people face is that their credit score is not good enough for a high credit limit. Failure in paying the bills of your existing credit cards for having a high credit utilization ratio can cause a dip in your credit score.
Furthermore, people often have too many loans that might discourage the lenders from allotting a high credit limit. Thus, a lot of people struggle with low credit limits on their credit cards. They are unable to maximize the potential of their credit card because of a low credit limit.
If you cannot get their credit limits up to the maximum amount, this is the right place for you. It might take a few months, but there are concrete ways to get India’s maximum credit card limit. Here is everything you need to know.
- Improve your credit score
One of the most efficient ways to access a higher credit limit is to increase your credit score. Your credit score is a three-digit number assigned by the credit bureau. The credit bureau evaluates things like your repayment history, timeliness of payment, and your credit utilization ratio.
All of this is reflected in your credit score that determines your creditworthiness. Naturally, people with a higher credit score are better potential borrowers. Hence, lenders don’t hesitate to assign them a higher credit limit. Here are some ways in which you could increase your credit score.
- Pay your dues on time: This includes the EMIs of your loans as well as your credit card bills. Over a few months of timely payment, your credit score will improve automatically.
- Improve your credit utilization ratio: Your credit utilization ratio is the percentage of your credit limit that you use up every month. Having a ratio under 30% helps boost your credit score.
- Have patience after rejection: If your credit card application is not approved, do not apply soon after. This hurts your credit score.
- Use your credit card regularly
If you have a credit card, make sure to use it for certain purchases. This will encourage the lenders to increase your credit limit.
- Keep paying your credit card bills on time
Make sure to keep a note of your credit card’s due date, which comes a few days after the end of a particular billing cycle. Do pay the outstanding amount on or before the due date. Such disciplined behavior portrays you as a responsible borrower. Hence, the banks and financial institutions will increase your credit limit.
- Maintain a decent credit utilization ratio
As mentioned earlier, the credit utilization ratio is based on the percentage of the total available credit that you use for purchases. Having a decent credit utilization ratio of under 30% helps increase the credit score and signifies that you are not too dependent on credit for your financial obligations.
- Repay your existing debts
If you have too many ongoing debts, they are seen as financial obligations. Hence, lenders have a valid reason to assume that you won’t be able to handle a higher credit limit.
- Provide a statement showing an increase in income
If your income has increased, you must show proof of that to the lenders. A higher income means a better debt-to-income ratio. Thus, there are high chances of getting access to the maximum credit limit.
- Make a request to the lenders
If you have been using your credit card for long enough, you can request your lender to increase your credit limit.
- Apply for a new card
Lastly, the easiest way to get a higher credit limit would be to apply for a new credit card. With a better credit score and newly inculcated financial habits, you will surely be eligible for a maximum credit limit on credit cards.
The Last Word
The tips mentioned above will help you secure the best credit cards that come with a high credit limit. You can follow these guidelines to improve your credit score — and subsequently, your credit limit, or you can get a new credit card with an improved credit score to attain higher credit limits.
One card that will help you in multiple ways is the Bajaj Finserv RBL Bank SuperCard. This multi-purpose card is an excellent option and will help you when you find yourself in financial difficulties.