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

    Custom quote

  • Credit Card Limit

    Loading your search...
  •  

    Learning about credit limits could be confusing. But it isn’t impossible to do so. To put it simply, the credit limit on your card is the maximum amount that you can spend on your card without you being charged any penalty.

    What is a Credit limit?

    Credit limit, as the name indicates, is the purchase limit set by the credit card company or a bank on a particular credit card. The limit, which is usually in terms of money, is the maximum amount the user can spend using the credit card.

    For instance, if your bank provides you a credit card with a limit of Rs.50,000, you cannot spend beyond that amount on your card.

    The credit limit varies based on the type of credit card and is determined based on the customer’s eligibility.

    Know All About Credit Card Limit

    How do Banks Determine Your Credit Card Limit?

    When you apply for a credit card, your bank determines your credit limit. This is done by taking multiple factors into consideration. These include:

    • Your annual income
    • Your age
    • The debt you currently have
    • The amount of credit in your name
    • Your employment status

    And most importantly, your credit limit is determined by:

    • Your credit history
    • Your credit score

    If the card you are applying for is your first credit card or you don’t have any credit to your name, chances are that your credit card will have a low credit limit. This is because the bank doesn’t quite know if they should take a risk on you or not.

    The good thing is that a low credit limit doesn’t stay low for a long period of time. If you use your card often and make your payments in full and on time, the bank will give you the option to increase the credit limit on your card.

    Difference Between Total Credit Limit and Available Credit Limit

    If you have scrutinised your statement, you will see that there are two limits mentioned – your total credit limit and your available credit limit.

    So, what exactly are these?

    Your total credit limit is the amount above which if you spend, the bank will charge you a penalty. This is basically the same as the credit limit mentioned early on.

    Your available credit limit, on the other hand, is the amount you currently have available to spend.

    Example:

    Let’s say that you have a credit card from Bank A with a total credit limit of Rs.50,000. This means that you can spend up to Rs.50,000 using your credit card. Now, let’s assume that in a given month, you spend Rs.28,000. The available credit limit is now Rs.22,000.

    This means that of the Rs.50,000 credit limit, you have spent Rs.28,000. So, you can now spend Rs.22,000 more before you reach the credit limit.

    When you make payments each month, your credit limit increases by that amount. And so does your available credit limit.

    If you take this example into consideration, let’s say that you pay the Rs.28,000 that you owe. Your total credit limit is still Rs.50,000, but this time your available credit limit is also Rs.50,000.

    Why Your Credit Limit Matters

    You now know what your credit limit is. This information should be enough for your day-to-day credit card related transactions, right?

    Well, not quite.

    Remember that all-important credit score? Well, your credit limit indirectly ties into it.

    It ties into it with the help of a widely used ratio which is used to calculate the current amount you owe on your card compared to the total credit extended to you and is expressed as a percentage.

    The formula for the same will be:

    • Credit utilisation ratio = (Outstanding balance on all credit cards/Total credit extended on all credit cards) x 100

    It is generally advisable to keep your credit utilisation ratio under 30%.

    What Does This Ratio Mean?

    Your credit utilisation ratio, as the name suggests, looks at how much of the available credit you tend to use. If your utilisation ratio is high every month (i.e., the amount you spend is close to your total credit limit), lenders tend to think of you as credit hungry. They also slate you as someone who is not able to manage their finances and hence may default on a payment.

    This, in turn, leads to a reduction in your credit score making it that much harder for you to get a loan.

    A low credit utilisation ration, on the other hand, means that you not only know how to manage your finances, but you will in all probability pay your bills in full and on time. From a lender’s point of view, you are someone they can hedge their bets on. In other words, a low credit utilisation ratio will lead to an increase in your credit score. This makes it more likely that if you are to apply for a loan, your loan application will mostly be approved.

    Using an Example to Understand Credit Utilisation Ratio

    Let’s use the earlier example again to better understand this:

    Your credit card from Bank A comes with a total credit limit of Rs.50,000. In the month of May, you charged Rs.35,000 to your card. Nothing wrong in that since it is within the credit limit.

    The credit utilisation ratio, however, is 70% [(35,000/50,000) x 100]. This is much higher than the advisable percentage.

    This high credit utilisation ratio could adversely affect your credit score.

    How to Increase Credit Card Limit

    Now that you know how important your credit limit is, the question to ask is how do you increase the credit limit on your card?

    • Use Your Card: If you use your card regularly and pay your bills in full and on time, the bank will automatically increase the credit limit on your card.
    • Provide Your Income Statement: There could be a case where your income has increased, and you are still using your old credit card. In such instances, you could approach the bank with your latest payslips and request for a credit card upgrade along with an increase in the credit limit.
    • Request to increase Credit Limit: If you send a request to the bank to increase your credit card limit, most banks agree to do so depending on the reason you have provided for the request. You can raise a request to increase the limit through netbanking or visit the branch of the bank.
    • Apply for a New Card: You could also consider applying for a new credit card which comes with a higher credit limit than your current card. In fact, if you have been making payments on time on your current credit card, you shouldn’t find it too difficult to get approved for a card with a higher credit limit.
    • Pay Your Bills on Time: If you are regular and timely in paying your credit card bills, your credit score can increase, and the bank will see you as a responsible cardholder. This often results in banks offering you a higher credit card limit.
    • Be Patient and Wait: If you hold a credit card long enough, the bank will automatically increase the credit limit on it. The only downside to this method of increasing your credit limit is that you need to be patient and wait.

    Benefits of Increasing the Credit Limit on Your Card

    You probably already have surmised some of the benefits of increasing the credit limit on your card, but here they are just so you know how an increase in your card’s credit limit can help you:

    Lowers Your Credit Utilisation Ratio: You probably already know this. But the importance of maintaining a low credit utilisation ratio cannot be stated enough. The lower the ratio the higher your CIBIL score.

    Makes It Easier to Get Loans: A high credit limit that you do not use makes banks and lenders look at you more favourably. Thus, getting approved for a loan becomes that much easier.

    Helps During an Emergency: A higher credit limit always comes in handy during a financial or a health emergency. 

    Access to Perks: Most credit cards that come with a high credit limit also come with many perks such as airport lounge access, membership to hotels, etc. 

    FAQs Related to Credit Card Limit

    What is the average credit card limit?

    Your credit card limit is based on a number of factors such as your income and your CIBIL score. As such, each person’s credit limit will differ.

    Can I increase my total credit limit?

    Yes, you can request your bank to increase the total credit limit on your card.

    What happens if I exceed my credit limit?

    If your transaction is not declined, you will be charged an overlimit penalty.

    How long does it take to increase the credit limit on my card?

    Ideally, if all your documents are in place a credit limit increase shouldn’t take more than a few days. However, this could differ from bank to bank.

    Does an increase in my credit limit affect my CIBIL score?

    An increase in your credit limit without a simultaneous increase in your expenses will lead to a lower credit utilisation ratio. This, in turn, may help in improving your CIBIL score.

    Is it good to accept an increase in my credit limit?

    Yes, it is good to accept an increase in your credit limit because it means that the bank trusts you with credit. As such, other lenders are likely to trust you with credit as well.

    Why was my credit limit increase denied?

    There could be many reasons why your credit limit increase may have been denied. Low income, decreased utilisation of credit card or default payments are few reasons.

    Should I reduce my credit card limit?

    In general, reducing your credit card limit without also reducing how much you charge to your card is not a good idea. However, if you believe that a higher credit limit will only tempt you to spend, then do request for your limit to be reduced.

    Can banks decrease my credit limit?

    Yes, your credit limit can be reduced by the bank. This is generally done due to low usage or if you have missed/defaulted on your payments multiple times. If you find that the credit limit on your card has been decreased, do call your card issuer and request for an explanation.

     
      

    Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

    Credit Card EMI Reviews

    • HDFC Bank Credit Card
      "Good Service"
      0.5 4.0/5 "Great!"
      I have HDFC Bank credit card which was direclty taken through Bank .I am using this credit card for the past 3 years ,This was a free card and there was no difficulties faced so far on using this credit card ,The credit limit was good and it was upto 75,000.I have got the credit card on time and it is really good to use and i am really satisfied with the service so far .
      Was this review helpful? 0
      , bangalore
      Reviewed on Oct 16, 2019
    • ICICI Bank
      ICICI Bank Credit Card
      "Need to improve customer service"
      0.5 3.0/5 "Satisfactory"
      It is very complicate to connect to customer service of ICICI bank. I have been using the Ferrari card for more than 1 year. It is a free card from 2nd year onwards. The credit limit is sufficient for 50 thousands. EMI option is applicable. I am using this card for purchasing purpose. Based on the usage I get reward points and cash back. There is no much benefits. For up gradation they detecting the amount of 2500 rupees.
      Was this review helpful? 1
      , tiruchirapalli
      Reviewed on Oct 15, 2019
    • SBI Cards Credit Card
      "Need to decrease interest charges"
      0.5 5.0/5 "Blown Away!"
      SBI offered a IRCTC credit card and I have been using for more than 1 year. It is a life time free credit card from 2nd years onwards. EMI option is applicable but charges are high. I use this card for ticket booking purpose for train and provide discount as well.
      Was this review helpful? 1
      , tiruchirapalli
      Reviewed on Oct 15, 2019
    • HDFC Bank Credit Card
      "Good"
      0.5 5.0/5 "Blown Away!"
      I am using HDFC bank regalia credit card for more than 3 years. For 1st year it was an annual fee chargeable. 2nd year onwards free card. The credit limit is given for one lakh. EMI option applicable and charges are nominal. I use this card for many purposes.
      Was this review helpful? 1
      , tiruchirapalli
      Reviewed on Oct 15, 2019
    • HDFC Bank Credit Card
      "Good"
      0.5 5.0/5 "Blown Away!"
      For the past 2 months before only I have taken money back credit card with HDFC bank. I got an offered from their end. It is an annual fee chargeable of 2400 rupees. The credit limit is sufficient of 42 thousands. I am not aware about an EMI option. I use for shopping and fuel purpose. Within 20 days I received a card.
      Was this review helpful? 1
      , bangalore
      Reviewed on Oct 15, 2019
    • IndusInd Bank Credit Card
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I applied for a credit card with INDUSIND bank on a month before which was processed through online. On time I received a call from their end for further processing. The credit limit is sufficient. Since I have an account with them I got an offer to apply for a credit. I used to get salary on a weekly basis to convert monthly basis it take few months so closed from my end.
      Was this review helpful? 0
      , bangalore
      Reviewed on Oct 15, 2019
    • SBI Cards Credit Card
      "Need to provided rewards points and cash back"
      0.5 4.0/5 "Great!"
      Through SBI, I had got an offer for a credit card to apply and got one year before. It is a simply save card. The credit limit is given for 20 thousands for a low one. EMI option is applicable and charges are nominal. I use this card for shopping and fuel purposes. Based on the usage I didn't get reward points and cash back so far.
      Was this review helpful? 0
      , mysore
      Reviewed on Oct 15, 2019
    • ICICI Bank Credit Card
      "Really good for transactions"
      0.5 4.0/5 "Great!"
      ICICI Credit card service is really good. They have offered me a credit limit of Rs. 56K and they have not increased my credit limit so far even though i use the credit card for past 2 years. I get the offers like cashbacks and discounts. They are sending the offer messages on a regular basis.
      Was this review helpful? 0
      , vellore
      Reviewed on Oct 15, 2019
    • HDFC Bank Credit Card
      "Good"
      0.5 3.5/5 "Pretty good"
      I am using HDFC BANK credit card and it was a better experience. Its been 2 years and it was hassle free. The credit limit is sufficient and every year, they were increasing the limit as per my usage. The customer service is really good. I never been charged for late payments. The interest is 15% for EMI conversion which is reasonable but not converted yet.
      Was this review helpful? 1
      , tirupati
      Reviewed on Oct 15, 2019
    • ICICI Bank Credit Card
      "Good card"
      0.5 4.0/5 "Great!"
      The credit card limit is low in ICICI BANK and its only 20K which have been using it for past 6months. I am using the card for Amazon online purchase because they are providing 10% discounts. The annual fee is not applicable. The payment mode is easy.
      Was this review helpful? 1
      , tirupati
      Reviewed on Oct 15, 2019
    • ICICI Bank Credit Card
      "Need to enhance the credit limit"
      0.5 4.0/5 "Great!"
      I am holding ICICI bank platinum credit card for the past one year. It is a life time free credit card. I received a card on time. The credit limit is not much sufficient of 20 thousands only. EMI option is applicable and charges are nominal. By his card I bought only one mobile phone and monthly paying for an EMI of 2700 rupees.
      Was this review helpful? 0
      , coimbatore
      Reviewed on Oct 15, 2019
    • Axis Bank Credit Card
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have Axis My Zone card which was taken through Bank directly.The credit limit was really sufficient and it was upto 75,000.There are good reward points as well as cash back offers which is very useful.I have got all the relevant details about the card process very clearly through the agent and this card is good to use as well.
      Was this review helpful? 1
      , navi mumbai
      Reviewed on Oct 14, 2019
    • ICICI Bank Credit Card
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have ICICI Bank credit card which i am using for the past 14 years.This was a free card and there was no difficulties faced so far on using this card .There are very good reward points and cash back offers which is really useful.I have Platinum card which is also good for me.
      Was this review helpful? 1
      , new delhi
      Reviewed on Oct 14, 2019
    • RBL Bank Credit Card
      "Convenient card"
      0.5 5.0/5 "Blown Away!"
      I use the RBL credit card for last 2 months. I actually trying for the money tap app, from that they directly contacted me and sent me a credit card. Documentation was a online process and one executive came to my office got the signature and took the photo.
      Was this review helpful? 0
      , bangalore
      Reviewed on Oct 14, 2019
    • HDFC Bank Credit Card
      "Money savings card"
      0.5 5.0/5 "Blown Away!"
      HDFC Credit card is good but there is no separate app for checking the details of credit card. Every time i need to login their online banking to check the statement. I do have a money back credit card and even they keep sending the discounts mails and i have used quite numbers for ordering a fuel and buying the fuel.
      Was this review helpful? 1
      , bangalore
      Reviewed on Oct 14, 2019
    • Citibank Credit Card
      "Convenient loan service"
      0.5 5.0/5 "Blown Away!"
      With CITI bank, I am holding the CITI premier miles card and it almost having a discounts on coupons. They keep on mailing me about the offers. The given credit limit is Rs. 57000 which is fine for me. It has a app and everything can be handled with the help of it.
      Was this review helpful? 1
      , bangalore
      Reviewed on Oct 14, 2019
    • HDFC Bank Credit Card
      "Excellent Service"
      0.5 4.0/5 "Great!"
      I have HDFC Bank credit card which was applied through Bank and got the card .I am using this credit card for the past 6 years.The credit limit was sufficient and there was no difficulties faced so far on using this card.I have got the credit card on time ,There are very useful reward points as well as cash back offers.
      Was this review helpful? 1
      , nellore
      Reviewed on Oct 14, 2019
    • ICICI Bank Credit Card
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have ICICI Bank credit card which was offered by Bank .I am using this credit card for the past 2 years ,The credit limit was good and this was a free card and there are good cash back offers as well as reward points ,This card is veryb useful and comfortable .I am really satisfied with the service so far .
      Was this review helpful? 0
      , erode
      Reviewed on Oct 14, 2019
    • HDFC Bank Credit Card
      "Good service"
      0.5 5.0/5 "Blown Away!"
      I have HDFC Bank credit card which was taken through Bank directly.I am using this credit card for the past 9 months and this card is having good cash back offers and reward points as well.This was a chargeable card and if spend 90,000 the charges will be wived off .I am really satisfied with the service so far on using this credit card .
      Was this review helpful? 1
      , noida
      Reviewed on Oct 14, 2019
    • ICICI Bank Credit Card
      "Need to enhance the credit limit"
      0.5 4.0/5 "Great!"
      I am having ICICI credit card for the past 8 years. Since I am holding a salary account with them they offered for the credit card and no documents submitted. It is an annual fee chargeable of 500 rupees. The credit limit is low given for 30 thousands only. EMI option is applicable and charges are nominal. I use this card for shopping and to pay for the loan. Based on the usage I get reward points.
      Was this review helpful? 1
      , erode
      Reviewed on Oct 14, 2019
    Common Loader Icon
    reTH65gcmBgCJ7k
    This Page is BLOCKED as it is using Iframes.