Whenever you use your credit card to purchase a product or avail a service, be it online or offline, you are essentially borrowing a certain amount from the card issuer that it pays to the merchant on your behalf at the time of purchase, you however pay the amount back to the issuer as your credit card bill. But card issuers can not lend you an unlimited amount, for obvious reasons. Therefore, every credit card comes with a credit limit- the maximum amount the card issuer is willing to lend you in a given statement cycle. It is also the maximum amount that you can spend with your credit card in the given payment cycle. In most cases, the credit limit is two to three times the monthly income of the cardholder.
What is Credit Limit?
The credit Limit is the maximum amount that one can spend using their credit card in a billing cycle. So, it is not true that you can spend an unlimited amount using your credit card, but there is a certain limit up to which you are allowed to spend. This limit can be different for everyone and is determined by the card issuers on the basis of different factors. However, cardholders can easily get their credit limit increased with time by using their card in a responsible manner.
What Determines Credit Limit?
The credit limit of your credit card reflects the confidence the card issuer has in you as a borrower that you will be able to pay the borrowed amount on time, i.e., you won’t default on your credit card bills. In other words, your credit limit is directly proportional to your ability to clear your dues on time, also known as creditworthiness.
Your creditworthiness and therefore the credit limit of your card depends upon multiple factors. Some of the factors that affect your creditworthiness are-
- Credit Score: It is one of the two most important metrics (the other one being income) that card issuers use to decide the credit limit of your credit card. A high credit score indicates good financial management and good repayment history on the part of the borrower.
- Income: It is another very important factor that card issuers consider for determining the credit limit of your credit card. Your monthly income directly reflects your ability to clear your dues on time. Higher the income, the more the creditworthiness, and therefore the higher the credit limit.
- Type of Credit Card: This is another factor that might affect the maximum credit limit allowed on your credit card. Premium credit cards usually have a high base credit limit, i.e. the minimum credit limit that one can get on a premium credit card is quite high, which means, if you have a premium credit card, your credit limit can not go below a certain number.
- Credit Limit on Your Other Credit Cards: If you already have one or more credit card(s), and are applying for a new card, the new card issuer will also consider the credit limit on your other credit cards to evaluate your creditworthiness. Therefore, if the credit limit on your existing credit card is, let’s say, Rs. 1 lakh, you can not expect a credit limit of Rs. 5 lakh on your new credit card.
How To Check Credit Limit?
You can check your credit card limit by logging in to your internet banking account. Almost every card issuer provides its customers with net banking facilities nowadays. You can easily check your total credit limit as well as your available limit through netbanking. Another method to check your credit limit is by contacting the respective bank’s customer care.
How to Increase the Credit Limit
There are many ways to increase the credit limit on your credit card, most of them being very similar to those for increasing the credit score, as credit limit, to a good extent, depends upon your credit score. Some of the best practices that you can incorporate in order to get the credit limit on your credit card increased are as under-
- Clear Your Dues on Time: One of the easiest ways to increase your credit score, and therefore your credit limit is the timely payment of your credit card bills as it indicates financial punctuality and responsible financial management on your part.
- Check Credit Utilization: You should keep a check on your credit utilization. Ideally, the monthly spends on your credit card should not exceed 30% of your credit limit.
- Reduce Your Debt: Another factor that card issuers consider while deciding your credit limit is the amount of debt you already owe to other lenders. If you owe too much debt to other lenders, you are not very likely to get a high credit limit on your credit card.
- Proof of Income: If your income has recently increased, show the proof of the increase in income to the card issuer to get a higher credit limit on your existing credit card.
- Apply for a New Credit Card: Another way you can get a higher credit limit is by applying for a new credit card with a higher credit limit. Although you should not expect a drastic increase in the limit, you can expect a slightly higher credit limit on your new credit card if you have been regular with payments on your existing credit card.
Benefits of Increasing Credit Limit
There are lots of advantages of increasing the credit limit on your credit card, some of which are as follows:
- You get more spending power with a higher credit limit. With a low credit card that you get at the beginning of your credit journey, is generally not enough to make large purchases, but you can easily make big purchases with a higher credit limit.
- Another major benefit of getting your credit limit increased is that your credit utilization ratio becomes less. In order to maintain a good credit score, it is essential not to utilize more than 30% of your credit limit. But, with a lower limit, you exceed this limit very often. So, if you get your credit limit increased, it would be easier for you to maintain a low credit utilization ratio.
Procedure for Increasing the Credit Limit
Many times card issuers increase the credit limit on your credit card on their own, you can also apply for an increase in credit limit on your credit card. Most card issuers have a definite procedure through which you can apply for a higher credit limit.
How to Increase the Credit Limit on HDFC Credit Cards?
You can get a higher limit on your HDFC credit card in two ways- if the bank has pre-approved your credit card for a higher credit limit, you can simply accept the limit enhancement offer via either internet banking or phone banking, otherwise, you can also request for a higher credit limit on your card.
Accepting a pre-approved enhanced credit limit
You can accept a pre-approved offer for a higher credit limit on your HDFC credit card in the following two ways-
- Through net banking: You can accept the offer for an enhanced limit on your HDFC credit card by logging in to your HDFC net banking account and selecting the “Card upgrade and enhancement” option from the menu.
- Through phone banking: You can dial the bank’s 24×7 customer care number 1800 266 4332 ad accept the higher credit limit offer.
Requesting a higher credit limit
You can also request the bank for a higher credit limit on your credit card by calling the bank’s customer care number or by visiting your nearest HDFC branch..
Documents to be submitted for higher credit limit
If a higher credit limit is not pre-approved on your credit card, you will need to submit a proof of income like salary slip or an audited ITR acknowledgment to the bank while applying for a higher credit limit.
How to Increase the Credit Limit on SBI Card Credit Cards?
The procedure to get a higher credit limit on your SBI Card Credit Card is very similar to that for getting a higher limit on your HDFC credit card. You can either accept a higher pre-approved limit on your credit card or you can also directly ask the bank for a higher credit limit.
You can accept a higher pre-approved limit on your SBI Card credit card via net banking, phone banking (dial SBI Card customer care at 1800 180 1290) or via SMS (SMS “INCR <last 4 digits of your card number> to 5676791).
In case your card is not pre-approved for a higher credit limit, you can directly ask for a higher limit to the bank either via phone banking or by visiting your nearest SBI Card office.
Just as for HDFC credit cards, you will need to submit a proof of increased income to the bank in case your card is not pre-approved for a higher credit limit.
How to Increase the Credit Limit on ICICI Credit Cards?
The bank monitors your credit card usage regularly to determine your eligibility for an enhanced credit limit. In case your credit card is eligible for a higher credit limit, the bank will intimate you regarding the same via SMS/e-mail.
You can also apply for a higher credit limit on your ICICI Bank credit card via internet bank, phone banking (by dialing 1860 120 7777 or 1800 103 8181) or by visiting your nearest ICICI branch.
If an enhanced credit limit is not pre-approved on your card and your are applying for a higher limit on your ICICI Bank credit card, you will need to submit a proof of increased income like salary slips or ITC acknowledgments to the bank.
How to Increase the Credit Limit on Axis Bank Credit Cards?
Just like other banks, Axis Bank also many times pre-approves your credit card for an enhanced credit limit. If your Axis Bank credit card is pre-approved for a higher credit limit, the bank officials will contact you and will guide you through the entire process of getting an enhanced credit limit on your card.
In case your credit card is not pre-approved for a higher credit limit, you can apply for a limit increase to the bank. You can submit your limit increase application in the following three ways-
- Through Internet Banking: To submit the credit limit increase request for your Axis Bank credit card via internet banking, go to your credit card account after logging in to your Axis Bank internet banking account and select the limit enhancement option.
- Through Mobile App: You can also apply for an increase in the limit on your Axis Bank credit card through the bank’s Android/iOS app. First, you need to log in to the app with your credentials and select the card you wish to increase the limit for. Here you will see an option to check for a higher credit limit on the selected credit card.
- Via Call/E-mail: You can contact Axis Bank customer care by dialing their 24×7 helpline numbers 1860 419 5555 or 1860 500 5555 and ask for a higher credit limit. Alternatively, you also shoot an e-mail to [email protected] and request a higher credit limit.
How to Increase the Credit Limit on American Express Credit Cards?
Based on your spending habits and financial punctuality (in terms of credit card bill payments), if American Express deems your credit card eligible for an enhanced credit limit, you will be intimated regarding the same via e-mail/SMS and your credit limit will be increased as per the pre-approved offer without there being a need for any kind of documentation.
If however, your American Express credit card is not pre-approved for a higher credit limit, you can yourself ask for a limit increase by sending an email at [email protected] or by dialing the card issuer’s helpline- 1800 419 3646.
American Express provides its cardholders a unique facility to temporarily increase the credit limit on their credit cards. You are charged a small fee for the temporary increase in credit limit. This feature can be really useful in case a large sum of money is suddenly required and the current limit on your credit card is not sufficient.
How to Increase the Credit Limit on Bank of Baroda Credit Cards?
You can directly contact the bank officials for credit limit enhancement on your Bank of Baroda credit card. You can either dial the bank’s helpline number 1800 258 4455 or visit your nearest BoB branch and ask for a higher credit limit. You might be asked to resubmit documents like salary slips/audited ITC acknowledgment as proof of increased income while applying for a higher credit limit on your BoB credit card.
How to Increase Credit Limit on Citibank Credit Cards?
As a Citibank credit cardholder, you can directly ask for a higher credit limit on your Citibank credit card by either calling the bank’s 24×7 customer care helpline number at 1800 180 2345 24 or by physically visiting your nearest Citibank branch.
The bank officials might require you to resubmit documents like salary slips/audited ITR acknowledgment as proof of an increase in income. However, if your credit card was pre-approved for a higher credit limit, you need not submit any proof of income.
How to Increase the Credit Limit on Kotak Mahindra Credit Cards?
If you think you are eligible for a higher credit limit on your Kotak Mahindra credit card, you can apply for the same directly to the bank officials. You need to either dial the bank’s 24×7 helpline number 1860 266 2666, or you can also visit your nearest Kotak Mahindra branch to apply for a higher credit limit on your Kotak Mahindra credit card. In most cases, the bank officials will ask you to resubmit certain documents like salary slips or audited ITR acknowledgement as proof of an increase in income.
For detailed information on how to increase the credit limit on credit cards from different card issuers, you may refer to the links provided in the table below-
Understanding every aspect related to the credit limit of a credit card is a very essential thing to do if you are a credit card user. One of the most important points to keep in mind is that you should not spend beyond 30% of your credit limit in order to build your credit score. However, doing it in emergency situations is always a different thing and is even more essential. Many cardholders start worrying about their credit limit if it’s too low, but nothing here is to worry about. Just keep using your credit card responsibly and once you build an excellent credit score, your card issuer will increase your credit limit even without a request.
Yes, based on your spending habits and financial punctuality (particularly in terms of timely payment of credit card bills), your card issuer can allow you a higher credit limit even if your income has not increased. However, it would be unrealistic to expect a steep increase if your income has not increased substantially.
Usually, the credit limit is around two to three times the monthly income of the crdholder.
If your card is pre-approved for a higher credit limit, you need not submit any proof of income. However, if you are applying for a higher credit limit yourself, you are required to resubmit a proof of income indicating the increase in your monthly income, so that the card issuer may determine your eligibility for an enhanced credit limit.
Salaried cardholders can submit their salary slips as proof of income, while self-employed cardholders can submit an audited ITR acknowledgment as their proof of income. These are the same documents that are accepted as proof of income at the time of applying for the card.
Yes, card issuers use the credit limit on your other credit cards to determine your creditworthiness, which does affect the credit limit of the new credit card that you are going to apply for.
A good credit limit is a limit that is more than sufficient for your monthly spends. Your credit limit can be considered good for you if your spends don’t exceed 30% of the total available limit each month.
You can check your credit card limit by logging in to your net banking account or by contacting customer care.
You can increase your credit card limit by requesting the same from your card issuer. But, keep in mind that you have used your credit card responsible without any payment defaults in the last six months before placing a credit limit increase request.
To increase the credit limit of a secured card (credit card against FD), you can either increase the FD amount or get your card updated to an unsecured credit card if you have built a good credit score.