In this article, we are going to explain on how to increase credit limit and the charges associated with it.
How do Banks determine your credit limit ?
Banks generally determine your credit limit based on your credit score. In order to increase your credit limit further, you must use the credit card more frequently. Your spending also should come closer to the limit of your card, however it should not exceed the limit. Pay your bills regularly and then raise a request to increase the credit limit.
On what basis banks increase your credit limit ?
Usually by looking at your spending pattern, banks will approve up to 30%. In case, if your requirement is to raise the limit by 2x or 3x, then banks may ask you to submit income proof such as 3 month salary slip along with 3 months bank statements. You may also need to provide the latest IT return, if you are self employed.
Does bank charge any fee for increasing credit limit ?
Usually banks don’t charge any fee for increasing credit limit. However, you can check with customer support before you file a request.
Can you decrease the credit limit ?
Yes, RBI has asked the banks to provide the facility for the card holders to manage their credit limits. You can do so by logging into banking apps or by logging into banking websites. Always try to keep the credit limit at 2 X your monthly spends.
What is the procedure to increase credit limit on add on cards and are there any charges associated with it ?
Once the credit limit on the primary card is increased, you could request the bank to do the same for add on card as well. Most banks will not charge any fee for this request.
Can we increase the credit limit for add on card higher than the primary card ?
No, Add on card can not have higher credit limit than the primary card, however add on card can have credit limit up to primary card’s limit. For example, if the limit on the primary card is 80 k, then limit on the secondary card can be up to 80 k or below.
We have also covered on how to manage the online transaction in an article earlier.