It's a common myth that you can spend an unlimited amount on a credit card. The truth is that your spending is bound by a certain credit card limit. It is the pre-given purchase limit of a credit card. In simple terms, it's the maximum amount you can spend on your credit card. This maximum limit is set by your lender and is different for different applicants.
Credit card issuers assess several key factors like your age, income, existing debt liabilities, credit history, and CIBIL score to arrive at this limit. In fact, the type of card you choose and the lender’s internal policies also impact the sanctioned credit limit. While it's set by the lender, credit limits are not static. With prudent credit card use and debt management, you can increase your credit score and enjoy a higher credit card limit.
However, knowing your current credit limit is essential to manage your expenses and debt ratio. Regularly breaching the credit limit can result in poor credit scores, making it difficult for you to secure loans in the future.
To know more about how to check your credit card limit, how to increase your credit card limit and more, read on.
Wondering how to check your credit card limit? Well, the process is pretty simple and easy. Here’s a list of ways you can review your credit card limit:
You can check your credit card limit via the net banking portal of your bank. You simply need to log into your account with your credentials and go to the credit card section. Here, you can pick the card you wish to review. You will find the maximum credit limit for the card listed under the ‘Credit Card Account Summary’ option.
You can call the bank’s credit card customer care number to instantly retrieve your credit limit details. Once the customer care executive verifies your identity, this information will be communicated to you.
Some lenders also offer instant credit limit checks via SMS and missed calls. The SMS code for lenders varies, but most have a dedicated SMS string code followed by the last digits of your card. Similarly, you can also check your credit card limit with a missed call from your registered number if your current lender offers this service.
Credit card issuers determine your credit card limit by taking various factors into consideration.
Financial institutions check your income and employment while determining your credit card limit because it is a reflection of your financial stability. With a stable source of income, the credit card provider considers you a safe borrower.
This assures the provider that you will pay your credit card bills on time, and the likelihood of default is lower. Therefore, if you have a stable income and employment, you might get a higher credit card limit.
The debt-to-income (DTI) ratio refers to the proportion of your debt as compared to your income. Credit card issuers consider this ratio because this indicates how effectively you can handle the debt and its repayment. If you have a lower debt-to-income ratio, you might get a higher credit limit, as you can handle it comfortably.
Your credit utilisation ratio is a measure of the credit that you have utilised in comparison to the total available credit. Generally, having a lower credit utilisation ratio is the right way to go about it. This is because it shows that you are not overly dependent on credit and that you can handle your finances responsibly. Therefore, maintain a lower credit utilisation ratio to get a higher credit card limit.
Yet another factor that credit card providers assess is your relationship and history with the institution. If you have active accounts with a bank and have a timely repayment history on your past credit, it can help.
This is because your past helps establish a history, showcasing that you are a responsible and trustworthy individual. This may increase your chances of enjoying a higher limit on your credit card.
the answer is simple – improve your credit score. For this, you have to pay all your credit dues on time, make the best out of your rewards and offers, utilise your card efficiently, and more. Here’s a detailed look into it:
So, to increase your credit limit, all you have to do is take steps to increase your credit score.
This is possible if you pay all your credit card dues on time, within the due date specified. If you have any other loans, ensure that you repay the EMIs for those loans on time. Also, check your credit report for errors, if any, and get them rectified promptly.
Use Your Card Wisely: Your credit utilisation ratio plays a significant role in determining your credit limit. It is the ratio between your credit card limit and the amount you spend on the card monthly. In fact, you should cap monthly spending on the card to 30% of your credit limit. Maintaining this ratio indicates that you are in control of your finances and, thus, a low-risk borrower.
Make Timely Bill Payments: Lenders base your credit card limit on your CIBIL score. And nothing affects your CIBIL score more positively than making timely payments. If you keep clearing your outstanding credit card dues in full before the due date, your CIBIL score will automatically improve. This will push the lender to increase your credit limit.
Contact Your Lender: You can directly contact your issuer and request for a credit limit hike. However, if you do so, be prepared to furnish valid proof to back your request. For instance, if you’ve approached the lender for a higher credit card limit on account of an annual raise, keep your new payslips handy.
Apply for a New Card:If you’ve been clearing your bills on time and maintaining your credit utilisation ratio, you might qualify for a new credit card with a higher limit. With both cards combined, you will have access to a higher aggregate credit limit.
The credit card limit is decided based on the yearly income, age, current debt amount, available credit, employment status, credit score, and credit history.
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.
While total credit card refers to the total amount you 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.
To know if you are eligible for a credit card limit increase, you must fulfil certain criteria. Factors such as age, credit score, employment type and duration, existing debts and liabilities, and your relationship with the credit card issuer are considered. These determine whether you are eligible for a pre-approved credit card limit increase offer.
First and foremost, you must know how to check your credit card limit. This will help you understand your credit utilisation ratio. To increase the maximum limit of your credit card, you must pay your bills in a timely manner and clear your existing debts.
You should not spend more than 40-50% of your available credit card limit, which will reduce the credit utilisation ratio. This, in turn, will improve your credit score and encourage banks to increase the card limit.
Alternatively, you can get in touch with the bank and inquire about increasing the maximum limit of the credit card.
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.
Banks revise the limits that they offer on credit cards periodically. While determining the credit card limit, banks typically consider various factors like your history of credit card bill payments, your credit scores, your income and employment and various other factors.
If you have a good record, then banks tend to increase their credit limit.
Lowering your credit card limit may not be a clever move, as it significantly impacts your credit score. So, if you need some emergency funds or need to apply for an instant loan, having a good credit score and a higher credit limit can come in handy at such times.
If you provide all the required documents, it should not take more than a few days for the bank to increase your credit card limit. However, this differs from one bank to another.
To enhance your credit card limit, you must have a good credit score (preferably over 750) and pay your dues in full. If you pay your bills on time, you can request the bank to increase the maximum limit within six months of credit card usage.
Your credit card limit is usually 2x to 3x of your monthly income. So, as an applicant with a monthly salary of ₹50,000, you can expect a credit limit of ₹1-1.5 Lakhs.
While you can use 100% of your credit card’s limit, doing so is not advisable. Exhausting your credit limit or maximising your cards upsets your CIBIL score, negatively affecting your future credit possibilities.
To find out your credit limit, you can log into your net banking portal or call your lender’s customer care unit. Your credit limit is also stated on your credit card statement. You can review the statement to instantly check your credit limit.
Yes. You can check your credit card’s limit online by logging into your internet banking account. You will need your ID and password to access the account. Your credit limit details will be listed under the ‘Credit Cards’ section of your account.
You don’t have to pay any add-on charges for credit card limit enhancements. Lenders raise your limit based on your credit assessment. So, there are no hidden charges associated with this process.