Santa Claus comes around just once a year. In the meantime, there are Credit Cards.
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    Benefits of Increasing Your Credit Card Limit

    Credit Limit is a term that refers to the maximum amount of money that people can borrow from their banks using their credit cards. This limit is set by the bank based on factors such as the income of cardholders, credit score, monthly salary, etc. People can use this limit for online and in- store purchases, bill payments, cash withdrawals, etc.

    The credit limit is revised periodically by the banks. During the revision process, banks consider various things like monthly card payments, credit score and income of the cardholders. If cardholders have a good record, then banks tend to increase their credit limit. Some people consider a high credit limit to be a bad thing, but it is not. A high credit limit has its own set of benefits.

    Mentioned below are some of the benefits of increasing the credit card limit:

    Low credit utilization

    By increasing their credit card limit, cardholders can lower their card usage. For example – If a person’s credit limit at present is Rs.1, 00, 000 and he/she has used only Rs.50, 000, then it means that he/she has used half of his/her full credit limit. So, in case he/she chooses to increase his/her credit limit to Rs.1, 25, 000, but continue to use only Rs.50, 000, then he/she will be using less than half of the credit limit. In this way, his/her credit utilization has been reduced. Here, the expenses of the person has not reduced, but he/she will be considered as a responsible user by financial institutions.

    Increase in the credit score

    WWhen credit cardholders use increase their credit limit but not their expenses, then they end up using less credit than the limit assigned to them. This increases their credit score because there is a decrease in their debts. Financial institutions consider cardholders who use an amount lower than their credit limit as financially secure and responsible because they are spending less than they can. This factor assures the institutions that they will receive their credit card payments on time.

    Multiple Cards not required

    It is better to have one credit card with a high credit limit rather than owning multiple cards with lower limits. Having one card makes it simple for cardholders to keep a track of their card activities. It helps them plan their expenses well. Also, cardholders can save on the extra charges that they would otherwise have had to pay for each of the cards, in case they owned multiple credit cards. Owning one card with a higher limit also increases their chance of having a good credit score. More than one credit card account can have a significant impact on the credit history, if all of them are not managed well.  

    Easier to Get Loans

    People with high credit limit are considered safe and reliable by banks, which makes it easy for them to get loans. Their increased credit limit acts as a proof to banks that they can be trusted with money. Also, a higher credit limit can result in a high credit score (as mentioned above) and a high score can help people get loans easily at low rates of interest. So, while negotiating for a loan, credit cardholders can use their high credit limit as a reason to get a good deal.

    More Rewards

    If credit cardholders have a high credit limit, they can spend more using their credit cards. People who always pay their full credit card bills on time can charge their purchases to their cards to earn more rewards. Also, if their bank has increased their credit limit, it means that their banks consider them important and may offer more reward points and benefits. The rewards can help cardholders in reducing their other spends. For example – Money spent on purchasing airline tickets, gifts, etc.

    Customer Protection

    Credit cardholders can use their cards to make large purchases if they have a high credit limit and earn rewards. Not many cardholders are aware of the fact that credit cards provide consumer protection such as price protection, extended warranty, coverage for lost goods, etc. If cardholders use their cards to make large purchases, they can use their card to protect themselves in case of any trouble.

    Helps during Emergencies

    A high credit limit on credit cards can help cardholders in situations where they are in urgent need funds. If they have a high limit, they do not have to borrow money from another individual or opt for a loan. Also, if they wish to take a loan, their limit will make it easy for them to get loans from their bank at a good interest rate.

    Disadvantages of Increasing the Credit Limit:

    Some of the disadvantages of increasing the credit limit are as follows:

    More Debts

    An increase in credit card limit provides more spending power to credit cardholders. If cardholders do not control their spending and increase their expenses along with the limit, then their debts will increase. Some cardholders end up spending more than they can afford at times when they have an increased limit, which results in them paying more interest on their credit card bills.

    Strict Enquiries

    When credit cardholders request for an increase in the credit limit, card issuers conduct a strict enquiry and evaluate their existing credit. Such enquiries can have a negative impact on a cardholder’s credit. If multiple enquiries are made in a short period of time, then it can result in the reduction of credit score.

    These are some of the benefits and disadvantages of increasing the credit limit. Credit cardholders should think and weigh all the pros and cons before they increase their credit limit. They should ensure that they plan their budget and control their spending, if they are increasing the limit.  

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    Benefits of enhancing credit card limit

    Credit card limit, as most of us are aware, is the maximum credit available on a credit card. Not all the credit cards come with the same limit, but vary depending on the cardholder’s income, monthly commitments, ability to repay the debt and other factors.

    Based on the spending behaviour and the repayment history, banks offer limit enhancement facility for the credit cardholders after using the card for a substantial period of time.

    When the credit enhancement is offered, many of us are confused whether to opt for it or to continue with the same limit. Well, there is no harm in enhancing your credit limit if you make use of it in a sensible manner. Mentioned below are a few benefits of enhancing your credit card limit.

    • Low credit utilisation ratio = high credit score: Most credit card users know about credit score and its importance in securing loans and other credit facilities. However, many are unaware about credit utilisation ratio which is a critical component of credit score. The higher the ratio, the lower the credit score and vice versa.
    • Credit utilisation ratio is calculated by dividing an individual’s total outstanding balances on all credit cards by the total credit limit available. Thus, the derived ratio shows how much percentage of available credit limit has been used by that individual.

      For instance, if a person’s credit utilisation ratio is 80%, it shows that he used 80% of his available credit limit, which says the person highly relies on credit hence his credit score goes down.

      The credit utilization ratio of approximately 35% or less is considered ideal. Which means your outstanding balance on the card should be way lesser than your credit limit. One way to achieve a high credit utilisation ratio is to increase your credit limit while maintaining the same spending on your credit card.

      For instance, let’s say your card limit is Rs.1 lakh and you use about Rs.80,000 every month giving you a credit utilisation ratio of 80%, which is way higher than the ideal ratio. Instead, if you increase your limit to say Rs.2 lakh and continue to spend the same, your credit utilisation ratio will come down to 40%, which is decent enough to achieve a high credit score.

    • Loan approvals become easy: Using only 30-40% of your available credit limit makes you appear as a financially responsible individual to the credit bureaus as it would increase your credit score. When your credit score is high, you would obviously become eligible for higher loan amounts, and the approval of any type of loans such as a car loan, mortgage or another credit card becomes easy. It also increases your chances of securing low interest rate on your loans.
    • Helps in times of emergency: Having a credit card these days is almost similar to having the same amount of money ready. If you maintain your expenditure on the card to a minimum, the remaining balance on the card serves as an emergency fund, which immediately comes to your rescue in times of need.
    • Having a good amount of unused amount is possible by enhancing your card limit while sticking to the same spending.

    • More reward points: The higher you spend on your credit card, the more reward points and cash backs you receive. But as per our earlier discussion, your spending on the card should be limited to achieve a higher credit score.
    • In that case, enhancing your credit limit would help you spend more and gain more reward points. As your limit of spending increases, you can spend more on the card, while maintaining lower credit utilisation ratio resulting in a higher credit score.

    • No need to apply for another credit card: Many people assume that having multiple credit cards would enhance their total credit limit thus enabling them to achieve a low credit utilisation ratio and high credit score.
    • Technically, it is correct. However, taking a new credit card is likely to affect your score as it shortens your length of your credit history. As length of credit history constitutes 15% of the credit score, the average credit history of the newer card and the older card would shorten the length of credit history and thus affects the credit score.

      Instead, go for limit enhancement on your existing card, which serves both the purposes of increasing your credit limit as well as positively impacting your credit score.

    Remember, you don’t have to pay anything to enhance your credit limit, nor will your annual fee or other charges on the credit card be revised. The charges may be revised only when you’re offered a new card to enhance your limit. In that case, make sure to be aware of all the terms and conditions before opting for a new credit card. Read more about

    Benefits of Increasing Your Credit Card Limit Reviews

    • ICICI Bank Credit Card
      "Good card"
      0.5 4.0/5 "Great!"
      I have been using ICICI bank credit card for while, there service is good, they have not charge any annual fee in this bank ,and i am happy with my credit limit which they have given in this card and they provide good offer and discount in shopping and in fuel , overall service is good.
      Was this review helpful? 0
      , chennai
      Reviewed on Jan 21, 2019
    • Standard Chartered Bank Credit Card
      "Good card"
      0.5 4.0/5 "Great!"
      I have been using standard chartered bank credit card for an while, they have not charged me annual fee in this card , as it is life time free credit card, and i am happy with my credit limit they have given me in this card, and there overall service is good.
      Was this review helpful? 0
      , chennai
      Reviewed on Jan 21, 2019
    • SBI Cards Credit Card
      "Good card"
      0.5 4.0/5 "Great!"
      I have been holding SBI credit card for long time, they have charged me annual fee in this card. but it use to get revise it like there is waived off option is available in this card, if i spend certain amount then my annual fee will get waived off, i am happy with my credit limit they have given me good limit, there service is good.
      Was this review helpful? 0
      , chennai
      Reviewed on Jan 21, 2019
    • Citibank Credit Card
      "Good card"
      0.5 4.0/5 "Great!"
      I have been using Citi bank credit card for an while, they have charged me annual fee in this card,but there is waived off option available in this card,like if i spend certain amount then my annual fee will get waived off, and i am happy with the credit limit they have given me in this card,there overall service is good.
      Was this review helpful? 0
      , chennai
      Reviewed on Jan 21, 2019
    • Axis Bank Credit Card
      "Good card"
      0.5 4.0/5 "Great!"
      I have been using Axis bank credit card recently, they have not charged me annual fee in this card, as it is life time free card, and i am happy with the credit limit they have given me in this card, the reason for choosing this bank credit card is because they provide me good offers and there service is good.
      Was this review helpful? 0
      , chennai
      Reviewed on Jan 21, 2019
    • HDFC Bank Credit Card
      "Good card"
      0.5 4.0/5 "Great!"
      I have been using HDFC credit card recently, they have charged me annual fee in this card, but there is waived off option available in this card ,like if i spend 90,000 in an calender year,then my annual fee will get waived off, and i am happy with the credit limit they have given me in this card, and they are giving good on line shopping offers.
      Was this review helpful? 0
      , chennai
      Reviewed on Jan 21, 2019
    • Kotak Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been using Kotak mahindra platinum bank credit card for an while,they have not charged me annual fee in this card, as it is life time free credit card, and i am happy with the credit limit they have given me in this card, and they have not giving much good offers, only for shopping this card is useful.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 21, 2019
    • Citibank Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been holding Citi Rewards bank credit card , they have charged me annual fee in this card they have charged me up to 500 rupees and annual fee,but there is waived off option available in this card, like if i spend certain amount they my annual fee will get waived off, and they have given me good credit limit in this card, and i am happy with reward point they use to give good reward points.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 21, 2019
    • HSBC Bank Credit Card
      "Good Card"
      0.5 5.0/5 "Blown Away!"
      There are many offers are going on and there is no annual fee hence i have opted this card. I have received the card on time. I got my first month bill and the statements are clear. I used to receive a promotional updates to my mails. Once i spoke with customer care and its easy to connect.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 21, 2019
    • ICICI Bank Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been using ICICI bank credit card for long time, they have not charged em annual fee in this card ,as it is life time free credit card, and i am not happy with the credit limit ,i want to extend my credit limit, and the best thing is there offers they give good offers in regular basis.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 21, 2019
    • SBI Cards Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been using Sbi credit card for long time,they have charged me annual fee in this card, but there is waived off option available in this card,like if i spend certain amount then my annual fee will get waived off ,and i am happy with the credit limit they have given me in this card, there offers are good.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 21, 2019
    • Citibank Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been holding Citi INDIAN OIL bank credit card for long time, they have not charged me annual fee in this card as it is life time free credit card, and i am happy with my credit limit they have charging me in this card, there service is good, they give good offers in fuels, like in petrol they use to give good cash back and even discount.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 21, 2019
    • HDFC Bank Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been using HDFC credit card for long time,they have charged me annual fee in this card, but there is waived off option available in this card, as i spend certain amount then my annual fee will get waived off , and i am happy with the credit limit they have given me in this card, and even there offers are good.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 21, 2019
    • Bank Bazaar Credit Card
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been using bank bazaar service from past 1-2 years ,there service is good, and i came to know through on line, as i usually check the credit score and compare the bank which one would be good, i have been using mobile application, it is easy to access, and there application is user friendly, overall service is good.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 21, 2019
    • Axis Bank Credit Card
      "Excellent card"
      0.5 4.0/5 "Great!"
      I have applied for Axis bank credit card recently,the reason for choosing this bank credit card is that they give good offers in on line like in flip kart or amazon site i use to get good cash back,and they have charged me annual fee up to 250 rupees, but it is kind of life time free card,like i use to get offers or points in it , and i am happy with credit limit they have given me in this card, they have given me 25,000 i am satisfied with it,and there service is good.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 21, 2019
    • Bank Bazaar Credit Card
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been using bank bazaar service for first time, i came to know about bank bazaar service through on line, and i have been using both website and mobile application which was easy to access,and even i have applied for credit card recently, there customer team had done time to time follow up with me regarding my application.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 21, 2019
    • SBI Cards Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been using SBI credit card from long time, they have not charged me annual fee in this card , as it is life time free card i have got ,and i am happy with the credit limit they have given me in this card,and there customer service is good, they provide good offers.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 21, 2019
    • ICICI Bank Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been using ICICI bank credit card for long time, the reason for choosing this card is that they are giving very good service, and they have not charged me annual fee in this card, as it is life time free credit card, and i am happy with the credit limit they have given me in this card, and there customer service is good, they use to give good offers .
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 21, 2019
    • Bank Bazaar Credit Card
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been using bank bazaar service from past six months, and i came to know about bank bazaar service through on line, as i was checking my credit report through it, and recently i have applied for credit card through bank bazaar , and i have been using mobile application ,it is easy to access and there application is user friendly application.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 21, 2019
    • HDFC Bank Credit Card
      "Bad experience"
      0.5 2.0/5 "Expected more"
      I have been applied for HDFC credit card recently, i am not happy with there service , like i have applied for regalia first card and they have given me club miles card ,i asked the customer care to change it they are not responding me and not resolving my issue , i am going to cancel this card now,i am not satisfied with there overall service, i had bad experience with this bank.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 21, 2019
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