The circulation of credit cards in India touched 48.9 million in May 2019, according to data from the Reserve Bank of India, a rise of 27% from 38.6 million credit cards that were in circulation in the same month previous year. In fact, the amount of transactions done using credit cards during 2018-19 was Rs. 6 lakh crore, a jump of 30% from the previous year. This clearly indicates that people are now more keen on the idea of buying on credit than ever before. As we increasingly prefer cashless means of payments, credit cards are becoming popular.
Today, credit cards available with issuers and banks are also loaded with useful features and benefits, including but not limited to, cashback offers, reward points and redemption, and dining privileges. The Bajaj Finserv RBL Bank SuperCard, available on Finserv MARKETS, serves you the power of 4 cards combined in one – cash, debit, EMI network and credit card. The way credit cards function is that you are allowed to transact as many times as you like within a billing period, as long as it is under the credit limit. It is this credit limit that determines how much you can spend on a revolving credit basis through a credit card. Later on, you pay the credit card bill within a stipulated time.
Focussing closely on the idea of the credit limit, we find that if you want the convenience of being able to transact on credit, the credit limit should be higher. If you are aiming for a higher credit limit, then you need to focus on improving your creditworthiness.
Your eligibility for a higher credit limit is dependent on your creditworthiness. Your creditworthiness is simply the ability to repay your borrowed sums in a timely and regular manner. If your creditworthiness is proven to be high, the bank or the credit card issuer is happy to expand the usable credit limit and even pepper in more attractive features.
Here’s how you can work on your this aspect:
a) Credit score
Your credit score, also called the CIBIL score after the Credit Information Bureau (India) Limited that maintains the credit records, is a measure of your creditworthiness. In order to be
eligible for a Bajaj Finserv RBL Bank SuperCard at Finserv MARKETS, you need a credit score above 750. If your credit score is higher and closer to the 900 mark, you will be eligible for a credit card with a higher credit limit. Always remember, the higher, the better.
If you have a strong credit history, that is, if you have been paying your loans and debts on time, including your credit card bills, you may have a shot at improving this score. This could well translate into better eligibility. You can also check CIBIL score for free using our smart financial health check tool.
b) Existing debts
Another factor that determines your creditworthiness is the existing proportion of debt in your portfolio. Even if you are paying your dues on time, your income is taken into consideration for a better assessment of your creditworthiness. This means that if you have existing debts and after the payment of your dues, you still have a good capacity to repay, then your eligibility can increase. But if the repayment of current dues leaves you with little to no disposable income, it will not reflect well on your creditworthiness.
Here’s how you can improve your eligibility in case of existing debts:
- Make repayments on time for your existing debts
- Pay your bills on time. This is not just limited to your loans and debts but also extends to your phone, electricity bills etc.
- Never reach the verge of exhaustion of your credit card limit. Do not be reckless with your purchases just because you have a specific limit. Budget your expenses outside of the credit card.
- It is always a good idea to keep the balance low on your instruments of revolving credit. This includes the existing credit cards. Be frugal now so you can have a better credit limit later.
- Look at your financial portfolio and ensure there’s a healthy balance of secured and unsecured credit.
All these practices will make a difference to your creditworthiness over a stretch of time – there are no quick fixes when it comes to the credit score. They will improve your credit score and in turn, your creditworthiness and your eligibility for a higher credit card limit.
“Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we works towards fulfilling all your personal and financial needs . What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.”