Your credit card limit determines the maximum amount you can spend with it. A high limit has a plethora of benefits, including comfortable shopping, higher reward opportunities and a better utilisation ratio.
You can ask your card issuer to increase your credit limit in order to improve your spending power. Since there is a risk of debt accumulation, lenders assess many factors to verify your financial capacity before approval. Here’s everything you need to know before applying for a higher credit limit.
How Frequently You Can Request
Depending on various factors, issuers decide your credit limit. Some of these factors are:
- Your credit history
- Your income and outgoings
- Your current credit limit
- Your credit habits
As such, any change in any of these factors opens the gate for an increase in your credit limit. Here are some points to note on how often you can get a boost on your credit limit:
- You should wait at least 6-12 months after opening an account before you put in a request
- If you have multiple credit cards, you can’t apply for an increase in credit limit for more than one
- Issuers pull a hard verification when you ask them to increase the limit, which decreases your credit score temporarily for a year, so you can’t apply for another
When to Request to Increase the Credit Limit
Your credit limit decided by the issuer is not set in stone. But you can ask for an increase under the following conditions:
- You have received an increment or promotion
- You have paid off all your credit card bills
- You have never missed your bill payments
- You have maintained a good credit history since getting the card
- You have a good financial relationship with the bank
- You have a good credit utilization ratio
- You have not received your annual increase
To ensure you meet all these criteria, you can check your credit card details on your net banking account. You should also check your credit score before requesting your issuer to increase your limit.
When to Not Request for a Credit Limit Increase
Here are some specific situations, which pull down the possibility of getting the credit increase approval.
- If you have just opened an account less than 6 months of age
- If the credit card company has quite recently increased your credit limit
- If you have failed to pay the credit card bills or in case of late payments
- If you recently applied for a new credit card with a higher limit
- If you have applied for a loan, it may result in a negative impression on your credit profile
How to Request a Credit Limit Increase
In most cases, issuers increase the credit card limit automatically upon the increase in income. Some issuers may also increase your limit annually if you have a good track record. If your limit does not increase, you can make a request by applying on the website or over a call.
If you choose to do it online, then follow the given process:
- Step 1: Log in to your online account/ mobile app
- Step 2: Go to the ‘Account’ section
- Step 3: Select the credit card you want to increase the limit
- Step 4: Follow the instructions on the screen
If you are applying over the call, you will need to verify your card account details. To complete the process, you should also have a few documents handy. These are:
- Employment status proof
- Annual Income
- Rent or mortgage monthly house payment
After reviewing the request, your credit card issuer can take a few days to make a decision.
What If Your Request Gets Rejected
If your request gets denied, the first thing to do is to ask the reason. Thereafter, you can make the required improvements.
- If you have a lot of late payments, clear your due
- If you have a low credit score, pay credit card bills on time to increase it
- If you have applied multiple times in a short span, wait for a while
- If you have applied to get a credit increase in multiple cards, avoid applying for another
- If you have a low income, show other sources of income or ask for a raise at work
Note that having a good credit record and income makes the process of getting the approval easy. If you have a good score, you can also get a new credit card with a higher limit and a better reward program to manage your cash flow. The One Credit Card is one such fantastic option with zero joining and an annual fee.
In addition, you can earn up to 5X rewards on the top two spend categories each month without any fee. With its smooth and sleek mobile app, tracking your expenses is easy, too. On the app, you can also look for offers near you and redeem them with ease. Apply now for the One Credit Card and try it yourself.
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