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What is Credit Card Limit

The term credit card limit refers to the maximum amount that can be borrowed on a credit card at any given time. This limit is decided by the credit card issuing authority and differs for each person according to their credit scores. It is communicated at the time of issuance and remains the same until the bank deems a change is necessary.

It is essential to be aware of your credit card limit to ensure your expenses don’t overshoot. Borrowing more on the card than your card limit can have a negative impact on your credit score. A reduced credit score hampers your creditworthiness and your chances of securing a loan at favourable terms in the future.

How to Increase Credit Card Limit

If you are a dependable user who spends wisely and pays the bills on time, the bank will reach out to you to increase your CC limit. However, if you need more funds, you can initiate the process. You can visit the bank or raise a request through net banking to increase your credit card limit. If you are wondering how to improve your credit card limit, here is a list of things you can do.

  • Submit Income Increase Proof

In case your income has increased, you can offer your latest payslips to the bank as proof and request to increase your credit card limit.

  • Clear Your Dues

Try to be regular with your payments to help increase your credit score so that the bank considers you for a credit card limit increase.

  • Bank Loyalty

You can also opt to hold on to a credit card for a longer duration so that the bank reaches out to you to increase the maximum limit of credit card

  • Reduce Fixed Debts

Work towards reducing your debts, such as personal loan EMIs, home loan EMIs etc., as this would create a positive impression on the bank.

  • Keep Credit Utilisation Low

You must ensure that your credit utilisation ratio, i.e., the amount borrowed against the credit available, is low as it improves your credit score. Try to maintain a credit utilisation ratio of 30%

  • Apply for a Credit Card

You can apply for a new credit card with a higher credit limit and use one or both cards for transactions.

Factors Considered by Banks in Deciding Your Maximum Credit Card Limit

  • Annual Income

A higher income indicates a better repayment capability. If your income is in the higher bracket, the chances are more that the bank would offer you a higher credit limit. On the other hand, the total credit limit would be low against a low income.

  • Age

Your spending capacity increases as you age and gain responsibilities. As a result, you may be eligible for a higher maximum credit card limit.

  • Current Debt Amount

The amount of money you borrowed in the past but are yet to repay has a negative impact on your credit score. As a result, if you have availed excess credit in the past but have been unable to repay, the bank would reduce your credit limit.

  • Employment Status

If you have been employed in your current organisation for a significant time, it indicates that you have a stable job and regular pay. As a result, the bank may consider your application for a higher credit limit. An unstable job and no fixed pay cheques can negatively affect the maximum credit limit.

  • Credit Score

Your chances of getting approved for a maximum credit card limit increase if you have a high credit score since this reflects good repayment behaviour.

  • Credit History

If there is no credit history and credit score to your name, and you have applied for your first credit card, the bank might consider giving you a card with a low credit limit as it is unaware of the risk involved. Similarly, if you have a good credit score and a stellar credit history, the bank may be comfortable offering you a card with a higher credit limit.

How to Check Maximum Limit on Your Card

To check the limit of credit card, you can opt for any of the following means:

1. Check Credit Card Limit Through Net Banking

If registered with the bank’s net banking service, you can check your credit card limit by following a few easy steps.

 

  • Step 1: Visit the bank’s net banking portal

  • Step 2: Use your credentials and log in to your account

  • Step 3: Go to the credit card section

  • Step 4: Select the credit card for which you want to check the limit

  • Step 5: Click on the 'View account summary' option

  • Step 6: Your credit card limit will be mentioned in the credit card account summary.

2. Checking Credit Limit Through SMS

You can also check the limit of your credit card by sending an SMS to your bank, using the keyword in the approved format, from your registered mobile number. You will get an instant reply from the bank with details regarding your credit card limit.

3. Checking Credit Card Limit Through Customer Care

A credit card limit check can also be done in real time by calling the concerned bank's credit card helpline number and placing a request with a customer care executive. After verification, the executive will communicate your credit card limit to you.

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FAQs on Credit Card Limit

✔️How is my credit card limit decided?

 The credit card limit is decided based on the yearly income, age, current debt amount, available credit, employment status, credit score, and credit history.

✔️Is it good to increase my credit card limit?

  If you tend to borrow more on your credit card, it is better to increase the credit card limit. It will lower the credit utilisation ratio and hence improve your credit score.

✔️How much is the credit card swipe limit per day?

 The credit card daily limit is set by the bank and can be modified by you based on your expenses and the total credit card limit. The credit card swipe limit per day or the credit card daily limit is the total amount that you can borrow on the card in a day.

✔️ What is the difference between the total credit card limit and available credit card limit?

 While total credit card refers to the total amount one can borrow using a credit card, the available credit card limit is the available money based on the bank account balance. Overall, if the entire available credit card limit has been used, the total credit card limit is reached. Most banks deny further transactions in this situation.

✔️How does your credit card limit affect the credit score?

 Credit card limit affects credit score because higher credit limits result in lower credit utilisation. Consequently, a lower credit utilisation ratio would translate to a better credit score.