Banks make periodic revisions in credit limits, making it high at some point in time and lower at the other. The revisions process involves a number of factors such as credit score, monthly card payments, shareholders income, etc. If the cardholders have a good record, they possibly enjoy an increased credit limit. Though some believe that a high limit isn't a good thing to go for, it still sets its own benefits. Let us find out best tips for increasing credit card limit at loanbaba.com.
1. Utilisation of low credit
An increased card limit does not always mean an exaggerated credit use. An individual may remain on the lower limit and not spend much. For example, if a person has a limit of Rs. 1 lakh and uses only Rs. 50,000, this will mean he has utilised half the credit limit. This further lets the person increase his/her limit to Rs. 1,25,000 but continues to use only Rs.50,000 every time which has now turned to the utilisation of less than half the limit. In such a case, the card holder's expenses do not rise, but recognition as a responsible user by financial institutions increases considerably.
2. Enhance your credit score
When the users enhance their credit limit but not their expenses, their ratio of credit usage gets smaller and smaller. This improves their credit score due to the decrease in the proportion of their unpaid loans. The financial institutions acknowledge such people as responsible and financially secure users. The banks are assured about timely payments of the credit and improve the users; credit score.
3. No multiple card requirement
It is better to hold one credit card with high limit rather than many with lesser credit. This is because one credit card at a time helps keep track of all expenses and plan expenses accordingly. Multiple cards lead to extra spending leading to a lessening of a good credit score. One card lets you smoothly manage your expenses.
4. Easy Loans
Banks offer high credit limit only to the ones who seem safe and reliable. This benefits the person in getting loans easily. The requirement of an apparent loan is the reliability and trust the user makes based on high credit score. They also benefit in terms of small interest charges on the loans. Thus, in order to negotiate and get a comfortable low-interest loan, it is imperative to hold a high credit score.
5. Attractive rewards
We know timely payments of the credit card bills lead to a high credit limit to the users. Also, the banks, in order to promote their credit card transactions, offer certain rewards and points on every purchase made through the credit card. These rewards help the users save on their expenses such as booking an airline ticket, shopping, gifts, etc. Thus, timely payments can lead to high credit limit and a decent amount of savings.
6. Customer protection
This is a factor many of us are unaware about. We usually make big purchases through credit cards on which one gets some reward points to earn. However, payments through card not just benefit through rewards but also provides customer protection. For example, coverage of lost goods, extended warranty, price protection, etc. are some factors that protect customers. While credit cards help users make large purchases, it also saves us from unnecessary troubles.
7. Help in emergency
Last but not the least, the credit cards are always helpful in situations where we urgently require funds but are short of the same. Rather than borrowing money or applying for loan with high interest rates, credit cards provide instant help at minimal interest rates.
We hope the expert advice for increasing credit card limit has helped you.