Your credit card’s credit limit indicates the amount that the issuer allows you to use. This is important because with a high credit limit you can make big-ticket purchases, improve your credit score, avail of a loan in an emergency and capitalise on offers, discounts, and reward points. If you are someone who is prudent with their finances, an enhanced credit limit gives you a greater degree of flexibility and security.
From improving your chances of faring well with the issuer’s automated credit limit algorithm to making a request yourself, here are 5 tips to successfully obtain a credit card limit increase.
Work on improving your credit score
Credit scores generally range from 300 to 900 and speak of your repayment capabilities according to how you have managed credit in the past. Thus, financiers check your credit score before approving a higher credit limit. While a score of around 700–750 suffices to get a credit card on favourable terms, you may need to improve upon your credit score if you desire a higher limit. Some things you can do to improve your credit score include clearing an outstanding debt and paying bills and EMIs on time.
Maintain a low credit utilisation ratio
Credit utilisation ratio is a representation of the amount of credit you use, as part of your credit limit. As counterintuitive as it may seem, in order to gain a higher credit card limit, you need to keep your total credit utilisation ratio on the lower side. This tells issuers that you are not credit hungry, have enough income, and aren’t heavily dependent on credit on a day-to-day basis.
Use the card regularly and make timely repayments
As a regular user, you become more of a valuable customer to the issuer and hence your request for an increased limit will carry more weight. In terms of repayment, you gain your financier’s confidence when you clear your dues in full in a timely manner. Since your issuer is assured of repayment, you have a better chance of obtaining an enhanced credit limit. Additionally, regular repayments also increase your credit score, which boosts your chances of securing a higher credit limit.
Make a request for a credit limit enhancement
In case you are not automatically picked for a credit limit increase by your financier’s back-end algorithm, you can personally request your manager for an increase. Look for facts and figures that support your request. Speak of the number of times you have made full repayments and how you have kept your credit utilisation ratio low.
Build a case by showing income sources
Whether you are approaching your manager personally, or are looking for an automatic credit limit enhancement, proof of additional income will act in your favour. This is all the more true in case you have a savings account with the issuing authority. Whether it is payment from a freelance project, an investment that is yielding high returns, or a part-time job you have taken up, multiple sources of income show that you can make larger repayments comfortably.
Another option that you have when you want a credit limit enhancement is to apply for a credit card that offers you a higher limit. When looking for an option that has simple eligibility criteria and extends to you a generous credit limit, consider the Bajaj Finserv RBL Bank SuperCard. This card comes in 8 different variants like Platinum Choice First-Year-Free SuperCard, World Prime SuperCard and Doctor’s SuperCard. This way you can pick a credit card as per your requirements.
Every SuperCard also offers you convenient features like 50-day, interest-free cash withdrawals from ATMs and 90-day, interest-free loans. Additionally, the SuperCard can also be used as an EMI Card as you can covert purchases of over Rs.3,000 to monthly instalments instantly. You can apply for the SuperCard and avail a sizeable credit limit quickly. Simply apply for your credit card online by checking your pre-approved offer.