How to Increase Credit Card Limit – Get Expert Tips & Benefits
It may not be necessary that you will always have cash ready in hand, or at the bank. There may be times when you will have to pay the bills, even if you are running out of liquid cash. It is during such instances that credit cards come in handy. That said, it is imperative that you remain prudent with your credit card spending. There is a limit to which you can rely on your credit card for purchases, or for emergencies. Frivolous usage of a credit card can often land you in hot waters.
Even if you remain vigilant with your spending, it is always beneficial to have a higher credit card limit. This begs the question: how to increase the credit card limit? Let us answer a few important questions about credit card usage, mainly, how to get a credit card and how to increase credit card limit.
How to get a credit card?
For those who are new to the credit card world, or are looking to get a new credit card, here’s everything you need to know about getting a credit card. Each bank offers dozens of credit card variants. The credit card limit differs from bank to bank, and from one individual to the other.
- Once you select the right card, check with the bank about your eligibility criteria and the documents required for credit card processing.
- Once you fulfill the eligibility criteria and documentation, your credit card application request will be processed and will be dispatched to your communication address.
- Once you get your credit card and PIN in hand, visit the nearest ATM of your bank to change the PIN.
The benefits of having a credit card are multifold. You can enjoy shopping, or pay your bills by using your credit card. However, it is imperative that you pay your dues before the payment due date. In fact, this is an important aspect and can impact your credit score.
Tips on how to increase credit card limit
Your credit card limit is determined by your issuing bank. When you apply for a credit card, your bank considers several factors, which include your age, annual income, current debt, amount of credit in your name, your employment status, and most importantly, your credit history and credit score. These are crucial to determining your credit limit.
- Improve your credit score – Credit score generally ranges from 300 to 900, based on your repayment capabilities with respect to how you have managed your credit in the past. A person with a credit score of 700-800 may find it easier to get an increased credit card limit. To improve your credit score, you can clear all your pending or outstanding debt, and pay bills and EMIs on time.
- Use your card prudently– It is of utmost importance that you use your credit card prudently. Only use your credit card when required. Do not use your credit card to withdraw money from an ATM unless it is absolutely necessary.
- Go for a secured credit card – One of the most effective ways to improve your credit score is by choosing a secured credit card, rather than an unsecured one. Secured credit cards are backed by deposits, which act as collateral. Thus, these types of cards ensure that the bills are paid on time and that there are no defaults.
- Maintain a low credit utilization ratio – Credit utilization ratio is the amount of credit you have used, against the total credit card limit. The higher the credit utilization ratio, the more it appears that you are overly-reliant on your credit card. This does not bode well in the eyes of financial institutions, which might consider you a liability. Thus, it is important that you always maintain a low credit utilization ratio.
There are a few things you can do to improve your credit score. Paying your dues on time, using your credit card sporadically, and only when you need to, and keeping the credit utilization ratio low are some of the tips you can follow, which could result in an increase in your credit card limit.