Credit cards are one of the best financial products, provided you use it wisely. If not, you pay unnecessary fees. Whether you are an experienced user of this banking facility or looking to apply for a credit card for the first time, you must understand and adopt best practices. Credit cards can be either extremely beneficial or incredibly harmful, depending on how you use them.
One of the most important aspects to understand about your credit card is your credit limit. This is the maximum amount outstanding on your card at any time without any penalty. Effective credit management is the key to establishing a better credit score and staying out of dues. If you’re wondering what the credit limit is for your credit card, check your billing details, log into your online account, or dial the customer care number.
How is the credit limit determined for you?
Credit card companies determine the credit limit for you by evaluating your earning potential, current financial status and credit history. If you have a history of late payments, a new credit history, low income or high debt levels, you may need to start with a lower credit limit. Your credit limit may not be the same throughout your lifetime. If you are willing to increase it, you can. Here are some tips for you.
1. Use a Credit Card for Foreign Travel
Credit card companies charge a foreign currency markup fee of up to 3.5% for foreign transactions. It is a major source of income for them. For this reason, foreign travelers are special customers for credit card lenders. If you are a frequent foreign traveller, you are a valuable customer and obviously deserve a good credit limit.
2. Apply for a credit card with a higher credit limit
You can apply for a credit card with the same lender or other lenders and this is the easiest way to get a higher credit limit. In most cases, new credit cards with higher limits are introduced. You can do this apply online for credit card. The approval of the new credit card will depend only on the CIBIL credit score and your current earning potential. Sometimes, using multiple credit cards can affect your credibility.
3. Request to increase the limit
The most commonly used practice to improve your credit limit is to request an increase for it. You can do this by speaking to customer service service representatives and filing a request online. The credit limit is redefined based on your current income and credit score. If the observations are positive it can be increased.
4. Increase Your Security Deposit
Getting a credit card on fixed deposit in India is the easiest way to increase the credit limit on a secured credit card. For secured credit cards, the credit limit is determined as a percentage of the fixed deposit. Pledging additional protection against a credit card can also increase the credit limit.
5. Credit Card Upgrading
Ask your banker if you are eligible to upgrade your current card to the next level card. Customers who have a better payment history are allowed to upgrade their credit limit. With upgraded credit cards, the credit limit increases.
6. Use Your Card Regularly
Make sure to use a credit card regularly if you intend to increase your credit limit. If you only use your credit card occasionally, it may seem like you don’t need a credit limit increase.
7. Submit Your Income Growth
Earning potential is the most important consideration in determining credit limit. The earning potential of an applicant indicates the possibility of credit bill payment.
8. Request limit increase only for your best credit card
Do not request limit increase for all cards. If you do this, the card issuer will verify the credit report. This inquiry may cause a temporary downgrade in your CIBIL credit rating and will reduce your chances of getting the limit increment.
9. Build Credibility
Build credibility and be loyal to your banker by making timely payments. This will definitely help you in securing an additional credit limit on your card.
10. Pay on Time
Make sure to pay the credit card bill on time to avoid interest and late fees. With frequent non-payments, you may incur late payment charges. In addition, your credit score is negatively affected and you need to constantly monitor yourself. credit card status.
11. Understand the Billing Cycle
All credit card companies in India will issue a statement with two dates: the billing date and the payment due date. Billing date indicates the date on which the bill was generated. New transactions after this date will continue on the next month’s statement. Payment Due Date tells you when a payment is due for a specific billing cycle.
12. Pay 100%
Paying off your credit card payments in full is very important to using a credit card wisely as it allows you to avoid interest and develop a higher credit rating. All credit card companies in India calculate interest on average daily balance.
13. Maintain an Optimal Credit Utilization Ratio
It is essential to keep your balance low relative to your existing credit limit. Maintaining a smaller balance offers two important benefits: 1) a lower balance helps you increase your credit rating and 2) you are more likely to pay off your balance in full and on time.
14. Monitor Your Monthly Statement
Constantly monitoring your monthly statement helps you check fraud, maintain low balance and stay on budget. Even if you have set up an automatic payment, you are still advised to log in and monitor your monthly statements.
These are the tips for those who want to increase their credit limit and get a good deal on it best credit card in india. Every credit card has a fixed credit limit and can be increased after a certain period. These pointers apply to all types of credit cards, whether a lifetime free credit card, a major credit card, or a zero annual fee credit card.
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