You too may want to increase your credit card limit during the festive sales! Learn how.

The festive season has begun, and with it, come bumper deals and festive sales! Shopping lists are long, and you're tempted to buy a favorite gadget or home appliance this time. If your credit card limit is falling short, it's bound to be a bit stressful. Credit cards have become an integral part of our lives. They not only serve as short-term loans for emergencies, but also offer great offers, discounts, and reward points on shopping.

Every credit card has a fixed limit, which depends on the cardholder's income, credit score, the card chosen, and the bank's criteria. You can't spend more than this limit. But the good news is that you have the opportunity to increase your credit card limit. If you're looking to increase your credit card limit, here are some easy and effective ways to do so.

The 5 Easiest and Most Effective Ways to Increase Your Credit Card Limit

Increasing your credit card limit isn't difficult. You just need to keep a few things in mind and approach it correctly.

1. Apply for a New or Upgraded Card

This is the most straightforward and easy way to increase your credit card limit. If you feel your current card isn't meeting your needs, you can apply for a new or upgraded credit card. Often, upgraded cards offer a higher limit, along with additional benefits and reward points. This can offer better benefits than your existing card.

2. Request a limit increase directly from your bank

You can also increase your existing credit card limit. You must request this directly from your bank. Most banks allow their customers to request this through their online banking portal, mobile app, or customer care. However, banks will carefully consider factors such as your credit history, credit score, and income before approving your request. If you have multiple cards, select the card for which you want to increase the limit.

3. Report your improved financial situation

Sometimes, your income increases or your financial situation improves, but the bank is unaware of this. For example, you may have received a salary increase in the last few months, but you are still using your old credit card with the existing limit. In this case, you can inform the bank about your new financial status by email or by visiting a bank branch. You can request an increase in your card limit from your bank by attaching documents such as your salary slip, income tax return, or bank statement.

4. Take advantage of annual increments

If you always pay your credit card bills on time and use your credit card responsibly, most banks offer annual credit limit increments. This increment is often automatic, but if you haven't received it, you can inquire with your bank. Sometimes, banks automatically increase your limit with special rewards and offers. Even if you don't need it immediately, increasing your annual credit limit can be helpful as it strengthens your credit history.

5. Improve your credit score

Since banks prioritize credit score when determining credit card limits, it's crucial to maintain a high credit score.

Timely payments: Always pay all your loan and credit card bills on the due date. Even a single missed payment can negatively impact your credit score.

Keep credit utilization low: Use only a small portion of your total credit limit. Experts recommend using no more than 30% of your total credit limit. For example, if your credit limit is ₹1 lakh, try not to spend more than ₹30,000.

Don't close old accounts: Keeping old credit card accounts open shows a longer credit history, which is good for your credit score.

FAQs (Frequently Asked Questions)

Q1: How long can I get my credit card limit increased?

A1: There's no set time limit. Some banks review your account every 6-12 months and, if you have a good credit history, may automatically increase your limit. You can also request it yourself after 6 months to 1 year.

Q2: Does a credit card limit increase affect my credit score?

A2: Yes, if your credit limit is increased and you keep your spending the same, your credit utilization ratio decreases, which is good for your credit score. However, if you start using the increased limit excessively and get into debt, it can harm your score.

Q3: What do banks consider when granting a credit card limit increase?

A3: Banks primarily look at your income, credit score, credit history (payment record), existing debt, and your relationship with the bank.

Q4: Can I get a credit limit increase if my credit score isn't good?

A4: If your credit score isn't good, banks are unlikely to approve your request. Focus on improving your credit score first, then apply for a limit increase.

Q5: Does upgrading your credit card automatically increase my limit?

A5: In most cases, yes. When you apply for a more premium or upgraded card, a higher credit limit often comes along with it, as these cards are often offered to customers with stronger financial profiles.