Get Out Of The Spending Crunch By Increasing Your Credit Limit With Your Credit Card
Credit cards have become increasingly popular and turned into the preferred mode of transaction instead of cash. If you’re responsible at spending and pay your bills on time, you may benefit from a higher credit limit. All credit cards have a starting credit limit, and you cannot do any unlimited spending.
Higher credit limits may be both a blessing and a curse. If you overspend too much and can’t seem to make repayments on time, you’re at risk of affecting your CIBIL Score negatively.
Banks are always looking to give credit cards to financially responsible individuals with a stable job and monthly income. If you’re self-employed, salaried, or a small business owner who is looking for emergency funding, getting a credit card will help you out. Here is how to increase credit card limit and what you can do about it.
Increase Your CIBIL Score
If you have any pending loans, EMIs or repayments due to financial institutions or other banks, it’s a good idea to start clearing those out. The more loans and pending payments you have, the greater the chance your CIBIL Score could take a hit. Your score can get affected negatively if your income takes a hit and you miss repayment deadlines. Clear your dues and have a clean slate before applying for a new credit card.
For those who don’t have a CIBIL Score, the easiest way to get started is by taking a loan. You can apply for a credit card and start using it to get there.
Be Responsible With Your Spending
If you’re the type who cannot manage his/her money properly, it’s time to unlearn bad financial habits and learn how to spend responsibly. You cannot afford to max out your credit line and doing that regularly could end up decreasing your limit if you fail to pay back. Work on your personal habits and lifestyle choices, so you become better at managing finances.
It might sound simple, but financially responsible individuals have discipline in their lives.
Increase Your Income
If you’re working at a job with a low monthly salary, you can move up the ladder or get a better paying job. When you increase your monthly income, you can submit to the bank a request for increasing your credit limit. A higher income also means you have the flexibility to make repayments faster and better.
You can try freelancing on the side of your regular job if you’re looking for ways to increase your income. Or, you can get a higher paying position at what you’re currently doing. There are many ways to increase your income by working, and as long as you have the drive and work ethic, it can be done. Just don’t give up.
Request Your Bank
You can file an application request to your bank asking for an increase in your credit card limit. In most cases, banks approve if the applicant’s profile and financial standing are good. If they don’t approve it and your CIBIL Score is good, you can write a letter to the branch manager asking why and how to increase your limit. The bank staff will respond to your queries and educate you about their policies regarding approving higher credit limits.
Wait For It
If you’ve been using your credit card responsibly and it’s just your first credit card, give it time. Financial institutions and organisations have measures in place to track credit card usage and spending patterns.
If you’re using a platform that’s automated, it will increase your credit card limit automatically, and you have to just wait. In other scenarios, banks will automatically raise your credit card limit when you’re frequently spending and repaying before the due dates. It’s a matter of building up good financial activity for your accounts. Make sure you pay your balance in full every month and do not default. The time it takes to raise your credit limit naturally is 6 months, so be patient.
Apply For A New Credit Card
You can always apply for a new credit card if you want to increase your spending limit. Some credit card owners apply for multiple cards through different banks, while others prefer to sticking to the same organisation.
Honestly, it depends on you, but if you have just one credit card, getting another one will help. And if you have multiple lines of credit and manage them well, your CIBIL score will go up faster.
Keep in mind that different banks will have different eligibility criteria when it comes to applying for multiple credit cards. Some will ask you for a higher CIBIL score and do stringent checks on your financial history. Do your best to maintain good standing and do not get blacklisted by CIBIL as a defaulter.
Try A Balance Transfer
You can save thousands on interest if you do a balance transfer. Banks offer balance transfer facility to move your money from card A to card B. If you have any unused balance, empty out your current credit card by doing a balance transfer and then request for a raise in credit limit. Some banks will charge you a balance transfer fee while some won’t. It’s easy and a smart financial move.
Start Using CRED
If you’re in massive debt and can’t seem to get out of your cash crunch, you could use some help. Debt consolidation is a popular way to take extra time and pay off your remaining expenses. CRED is an online app that helps you pay your credit card bills on time. But you need to have a good CIBIL score (over 700) to be eligible for it. Since CRED is recognised by banks, CIBIL database, and financial institutions, you’ll have an easier time getting extra credit if you maintain a good financial profile.
Getting out of a spending or cash crunch and building up a good line of credit takes time. It’s not going to happen overnight, but with a few smart measures, you can go long way. Start tracking your spending and make sure you pay your bills on time.
Using credit cards can add a lot of flexibility to your life since you’ll get access to offers and exclusive rewards. With a higher CIBIL score and a good line of credit, you will get multiple opportunities for reaping the various benefits of the best reward credit cards in India.
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