Last updated – 03 February 2021
So, you are not happy with your credit card current limit?
You were expecting the bank to increase your credit card limit automatically because of your great credit history but that didn’t happen.
Perhaps, some of you might have even ended up crossing the credit limit a few times leading to higher overdraft charges.
A higher credit card limit means higher purchasing power that you must be eagerly looking forward to. Increased credit limit also helps in improving your CIBIL score because bank thinks that you pose less risk for lending money.
Now, the million-dollar question is – how to get a credit limit increase?
I have shared 11 tips that personally helped me to increase my credit limit. I hope these tips will definitely help you as well.
#1. Use Your Credit Card For Foreign Traveling
Do you know that banks charge a foreign currency markup fee, up to 3.5%, for every credit card transaction made outside India? This is a great source of income for the banks and makes the foreign travelers a special segment of customers for the banks.
So, if you are a frequent foreign traveler, make use of your credit for all your spending – from food to shopping to travel to other engagements. This will automatically make you a more valuable customer for the bank, demonstrating the case for a higher credit limit.
#2. Apply for New Card with Higher Credit Limit
Applying for a new credit card (with current or another bank) is the simplest way to increase your credit card limit. When you apply for a new credit card, in most of cases, the card issuer or the bank gives you a higher credit limit.
Since, the approval of the new credit card will depend on your CIBIL score and your present income, make sure that you are doing well on both these parameters to get easy approval.
If you need some help in finding a new credit card that best suits your needs, then you can read my post 11 Best Credit Card in India.
Remember – If you already have more than two or three credit cards, this strategy may not work for you. Because applying again for another credit card may negatively affect your credit score.
#3. Request For Limit Increase
While it is common to see banks automatically increase the credit card limit periodically, many times they do so on request. So, go ahead and speak to your customer care service representative and ask for an increase in the credit limit. You may also be able to file a request online for the same.
When you request a credit limit increase, the bank checks your CIBIL score, past records like credit card bills, your payment history, and your current monthly income. This is to check your present creditworthiness.
If you have a good credit history and doing well on other parameters, you will get your credit limit increased.
As a thumb rule, remember asking frequently may cause your application to be rejected and you could end up waiting for many more months before you can reapply.
For example, asking for a 25% rise in credit limit has higher chances of getting approved than say asking for a 50 % or 100% raise. Once you get your new credit limit raised, you can reapply after some time for a further increase in credit limit.
You may also like read A Step by Step Guide to Check Your CIBIL Score.
#4. Increase Your Security(Fixed) Deposit
The easiest way you can follow is to increase the security deposit(fixed) associated with it. If your credit card is a secured card ( a credit card issued against a fixed deposit), then this strategy will work for you.
The credit limit of your secured credit card is decided directly as the percentage of the fixed deposit, say for instance – 80% of the fixed deposit.
If your CIBIL score is poor or your payment history is not so great, increasing the security deposit amount could convince the banks of your creditworthiness.
So, more the amount you add to your security deposit, the higher the limit your credit limit can be raised.
#5. Ask for a Credit Card Upgrade
In general, the credit limit increases once you upgrade your credit card.
So, ask your bank if you are eligible for an upgrade of your existing credit card. If you have a good payment history, getting an upgrade from your bank shouldn’t be a problem.
In addition, check with your bank and if required make a separate request for increasing your limit along with the card upgrade application.
You should also keep in mind that the annual fee for the upgraded card might be higher than your current credit card.
#6. Use Your Card Frequently
Use your card frequently and repay the credit card bill on time. This is a great way to convince your bank that you deserve a higher credit limit. If you use your credit card only once in a while, it seems like you don’t need an increase in credit limit.
Banks love customers who use their credit cards for all their spendings – from shopping to groceries to utility payments and more. Once your financial credit footprint increases due to frequent card usage, banks will automatically take notice and would offer to enhance your credit limit.
But do keep in mind that overdraft or full limit utilization will harm your CIBIL credit score badly. Ideally, you can consume up to 70% of your credit limit.
#7. Show Your Income Increment
Income is the most important factor that banks look at when deciding the credit limit whether approving a new card or increasing credit limit. because the income level of the applicant represents the probability of credit bills repayment.
When banks see that you are making more income, they are more inclined to believe in your better creditworthiness.
So, whenever you get a salary increment, make sure that you share it with the bank, considering your case for a higher credit limit.
#8. Request Limit Increase Only for your Best Credit Card
If you have multiple credit cards, never request a limit increase for all of the cards. Don’t assume that if you apply for a credit limit increase on all of your cards, all will get approved.
Instead, just pick one best credit card and apply for credit limit increment.
When you request an increase, the bank will pull your credit history to check if you are creditworthy and in that process, the inquiry will be noted on your credit report and will temporarily dip your CIBIL credit score. So, more the inquiries more will be the dip in credit score.
Therefore, focus on your best credit card and make one strong case to the bank, increasing your chances of a credit limit raise.
#9. Build Your Case, Don’t Be Desperate
Although banks are eager to issue credit cards and increase the credit limit to customers owing to higher profits for them, they would refrain from doing so if you come across as a desperate customer who is need of more money.
So, never ever ask the bank for the limit increase saying that you have an emergency and you desperately need money for paying your bills. This behavior demonstrates your bad finances and can even raise a question on your credit account.
Instead, build a strong case by reminding your bank that you have been a loyal customer for X years/months, have never missed a payment, always paid the bills on time, and so forth.
If you have a better limit on your other credit cards do let the bank know about it.
This way of building a strong case ensures that you have a better chance of getting approved for a higher credit limit.
You may also like to read 11 Benefits of Credit Card that will save you more than Rs 10000 every year.
#10. Don’t Make Repeated Requests
It is important that you don’t make repeated requests for credit limit increase if your initial request gets turned down.
Your credit limit increase request could have been denied for different reasons like
- your account is too new (less than 6 months old)
- you have a low CIBIL score
- your current income doesn’t allow for the increase
- you don’t pay your credit card bills on time
So, rather inquire and focus on the reason for the denial and work on fixing it. Wait a few months and once you are confident that you have taken care of the credit issue, apply for a credit limit increase.
#11. Wait for Automatic Limit Increment
When nothing works then waiting patiently will only work. Many banks review their customer’s credit card accounts periodically to determine whether they meet the criteria for a credit limit increase.