Santa Claus comes around just once a year. In the meantime, there are Credit Cards.
  • 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

      

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    Benefits of Increasing Your Credit Card Limit Reviews

    • SBI Cards Credit Card
      "Very Good Service"
      0.5 5.0/5 "Blown Away!"
      I have applied for State Bank Of India Credit Card directly with the bank ,the credit limit was ok ,I am using it for the past 2 and a half years ,There was cashback offers and reward points .I dont have any extra features on this card so far .The agent gave all the required details of the card .
      Was this review helpful? 0
      , bangalore
      Reviewed on Apr 22, 2019
    • RBL Bank Credit Card
      "Very Good Service"
      0.5 5.0/5 "Blown Away!"
      I have applied for Ratnakar Bank Credit card through online ,the credit limit was 50, 000it was not sufficient .I ahve started using this credit card .I have received the credit card on time .The agent gave all details about the credit card .I have not faced any difficulties on submitting the documents.
      Was this review helpful? 0
      , bangalore
      Reviewed on Apr 22, 2019
    • HDFC Bank Credit Card
      "Good service"
      0.5 5.0/5 "Blown Away!"
      I have good experience with HDFC BANK . Their branch support services are always nice and ready to help anytime. Overall it was a good banking experience with them. I never had any issues with their services. They always provided me with immediate response.
      Was this review helpful? 0
      , mumbai
      Reviewed on Apr 22, 2019
    • ICICI Bank Credit Card
      "Average card"
      0.5 3.5/5 "Pretty good"
      I've been using the ICICI BANK Credit card for a while.There is charges while getting the card . I do get more flexibile options. I can easily convert my purchases into EMI, there are some processing charges and they also charges a nominal interest. However the service is very useful I never had any problems with their service.s
      Was this review helpful? 0
      , mumbai
      Reviewed on Apr 22, 2019
    • HDFC Bank Credit Card
      "Good credit card"
      0.5 5.0/5 "Blown Away!"
      I am so happy with a newly purchased HDFC credit card . They just taken ten days for dispatching the credit card to me . I am highly satisfied with the credit limit given by HDFC . Though It is not a life time free card and I am getting more offers from HDFC .
      Was this review helpful? 1
      , secunderabad
      Reviewed on Apr 22, 2019
    • SBI Cards Credit Card
      "Average card"
      0.5 3.5/5 "Pretty good"
      I have been using STATE BANK OF INDIA Credit card . Customer support is also good. I am long time customer of SBI and never had any issues with their services. But now i close this card because i have to use only one card . There is annual fee at the time of getting the card .
      Was this review helpful? 0
      , mumbai
      Reviewed on Apr 22, 2019
    • HDFC Bank Credit Card
      "Average card"
      0.5 3.5/5 "Pretty good"
      I hold HDFC BANK credit card , i close this card because it has very low credit limit . This card is very easy to handle . I am not happy with the services and credit limit is very low i was expecting more limit here . Offers are good , i am using this card for more than 1 year .
      Was this review helpful? 0
      , mumbai
      Reviewed on Apr 22, 2019
    • Bank Bazaar Credit Card
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I came to know about Bank bazaar through online ,then tried checking credit score ,The credit score was not updated one so far that is the only suggestion .This website is easy to use .There was no issues faced so far on using this portal .This portal is doing a very good service.
      Was this review helpful? 0
      , bangalore
      Reviewed on Apr 22, 2019
    • Bank Bazaar Credit Card
      "Best service"
      0.5 4.5/5 "Excellent!"
      Bank Bazaar a is a great platform to compare and choose various banking products. The whole application process was smooth and hassle free.The service is excellent and very easy there was no so much of documents . The website of bank bazaar is easy to navigate and is user friendly.
      Was this review helpful? 0
      , mumbai
      Reviewed on Apr 22, 2019
    • American Express Credit Card
      "IN some outlest i cannot swipe "
      0.5 4.5/5 "Excellent!"
      I bought the AMERICAN EXPRESS BANK credit card . I Haven't used much. I got the card with in few days. They are notifying their customer about the due dates and billing cycle. I'll have to wait and see how this card works out for me after usage. I cannot swipe every were .
      Was this review helpful? 0
      , mumbai
      Reviewed on Apr 22, 2019
    • Citibank Credit Card
      "Good for fuel filling"
      0.5 4.5/5 "Excellent!"
      I purchased Indian oil credit card from CITI bank its good for the petrol filling and they are providing petrol surcharges and cash back. Its a chargeable card around Rs. 500 but if I make certain transaction of Rs. 30,000 they give waiver option. The due date is also convenient for me.
      Was this review helpful? 0
      , bangalore
      Reviewed on Apr 22, 2019
    • IndusInd Bank Credit Card
      "GOOD"
      0.5 5.0/5 "Blown Away!"
      The documentation process was simple and easy for getting the INDUSIND BANK credit card and it took 10 days to get the card. The credit limit is lesser than other card, it is a life time free card but i am not getting any offers with this credit card.
      Was this review helpful? 0
      , bangalore
      Reviewed on Apr 22, 2019
    • RBL Bank Credit Card
      "Good card"
      0.5 4.0/5 "Great!"
      RBL bank credit card best thing i found is that they use to give good offers in shopping, discount offers cash back are available whenever i use for shopping. They have been charging me annual fee, but waiver option is available, they use to give good service.
      Was this review helpful? 0
      , bangalore
      Reviewed on Apr 22, 2019
    • SBI Cards Credit Card
      "GOOD"
      0.5 4.0/5 "Great!"
      I am having the credit card with the SBI CARD where the credit limit with this card is good with no issues. The customer service is good and they have given with the payable card but there was option of wavier off available. They are providing with EMI option.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Apr 22, 2019
    • Axis Bank Credit Card
      "Good card"
      0.5 4.0/5 "Great!"
      I am using Axis bank credit card, where i am very satisfied with credit limit which they have been giving to me, their customer service is good, they use to response me well, it is life time free credit card have been got from them, their offers are good, so far i did not face any issue.
      Was this review helpful? 0
      , bangalore
      Reviewed on Apr 22, 2019
    • HDFC Bank Credit Card
      "GOOD"
      0.5 5.0/5 "Blown Away!"
      I am holding the credit card with the HDFC BANK where the card has the good credit limit added on that the customer service is good. There is a option available of EMI conversion where the payment can be converted and paid with hassle free. It is a payable but wavier option is there.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Apr 22, 2019
    • Bank Bazaar Credit Card
      "USERFRIENDLY PORTAL TO USE"
      0.5 5.0/5 "Blown Away!"
      It is the first time experience with the Bankbazaar.com and i have a good experience also i have been using through the website as the portal is convenient and user friendly to access. The customer service is good and responsive they explain the details of the card.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Apr 22, 2019
    • Citibank Credit Card
      "BETTER"
      0.5 5.0/5 "Blown Away!"
      The documentation process was simple and easy to get the card with the CITI BANK. It took may be 1 week to 15 days approx to get the card. The credit limit is good, it is a life time free card. I am using from last one month, i am getting rewards points.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Apr 22, 2019
    • IndusInd Bank Credit Card
      "Good card"
      0.5 4.5/5 "Excellent!"
      INDUSIND BANK PLATINUM AURA EDGE CREDIT CARD recently i had applied, they have been not charging me annual fee, it is life time free credit limit, the best thing i like in them is that it is easily available in many outlets, and it is life time free credit card, the card came on time.
      Was this review helpful? 0
      , bangalore
      Reviewed on Apr 22, 2019
    • Bank Bazaar Credit Card
      "Grateful to Bank bazaar service"
      0.5 4.5/5 "Excellent!"
      I am so thankful to the bank bazaar service . When I am looking for a new credit card , I applied immediately in Bank bazaar . They chosen me the correct credit card and given me a Rs 750 coupon also. This is something new for me . They are doing a great service on behalf of banking sector .
      Was this review helpful? 0
      , bangalore
      Reviewed on Apr 22, 2019
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