A credit card is likely one of the best financial products, given you use it wisely. Whether not, you find yourself paying unnecessary charges. If you are an experienced user of this banking facility or willing to apply for a credit card for the first time, you must understand and adopt the most efficient practices. Credit cards can either be immensely advantageous or incredibly harmful, depending on how you use them.
Some of the imperative aspects to understand approximately your credit card is your credit limit. It’s the maximum outstanding balance that you must have on your card at any provided point in time without attracting a fine. The effective management of a credit limit is the most important for establishing a better credit score and staying out of dues. In case you are conjecturing what the credit limit is for your credit cards, refer to your billing remark, log into your online account, or dial the customer care number.
How is the credit limit set for you?
Credit card companies fix the credit limit for you by evaluating your earning potential, the present financial position and credit history. If in case you have a history of late payments, a new credit history, low earnings or a high debt level, you’ll have initially a low credit limit. Your credit limit cannot be the same all through your lifetime. In case you are willing to give a boost to it, you’ll be able to. Here are a couple of tips for you.
1. Use credit cards for foreign traveling
Credit card companies charge an out of the country currency markup fee up to 3.5% for out of the country transactions. It is a prime source of income for them. Owing to this reason, out of the country commuters are special customers for credit card lenders. In case you are a frequent out of the country traveler, you’re a valuable customer and obviously deserve a good credit limit.
2. Apply for a credit card with higher credit limit
You’ll apply for a credit card with the same lender or other lenders to receive more credit limit and it is the most straightforward way. Normally, new credit cards are offered with higher limits. You’ll apply for a credit card online. The approval of a new credit card shall merely rely on the CIBIL credit score and your current earning potential. Once in a while, the usage of a couple of credit cards can affect your credibility.
3. Requesting for limit increase
The most commonly used practice to toughen your credit limit is by requesting a hike for it. You’ll do so by speaking to customer care service representatives and dossier a request online. The credit limit is redefined on the basis of your present income and credit score. It may be extended whether the observations are positive.
4. Increase your security deposit
Obtaining a credit card against constant deposits in India is the most straightforward way to increase the credit limit on a secured credit card. For secured credit cards, the credit limit is decided as the percentage of the constant deposit. Pledging extra security against credit cards can also increase the credit limit.
5. Credit card upgrading
Ask your banker in case you are qualified for the upgrade of your current card to the next level card. The customers who have a better payment history are permitted to upgrade their credit limit. With an upgraded credit card, the credit limit increases.
6. Use your card frequently
Remember to use credit cards frequently whether you intend on enhancing your credit limit. Whether you use your credit cards from time to time, it sort of feels like you don’t require an increase in the credit limit.
7. Submit your income increment
Earning potential is the most dominant consideration in determining the credit limit. The earning potential of an applicant indicates the opportunity of credit invoice payments.
8. Request limit increment only for your best credit cards
Do not request a limit increment for all cards. Whether you do, card issuers will verify credit reports. This enquiry may cause a transitory dip in your CIBIL credit rating and will decrease the chances of getting limit increment.
9. Build credibility
Build credibility by making payments on time and be loyal to your banker. This will definitely let you gain the extra credit limit on your card.
10. Make payments in time
Remember to pay credit card invoice on time as a way to steer clear of interest and late fees. By constantly lacking payments, you’ll be able to end up remitting late payment charges. In addition, your credit score is negatively impacted and you wish to have to incessantly monitor your credit card status.
11. Understand the billing cycle
All credit card companies in India shall issue a remark with two dates: the billing date and the payment due date. The billing date indicates the date on which the invoice used to be generated. New transactions beyond this date will go on to the subsequent month’s remark. The payment due date tells you when the payment for the particular billing cycle is due.
12. Make 100% payment
Remitting your credit card payments in full is enormously important for utilising a credit card intelligently since it allows you to both steer clear of interest and develop a high credit rating. All credit card companies in India compute interest on an average day-to-day balance.
13. Take care of an optimum credit utilisation ratio
It is very important to retain your balance low relative to your existing credit limit. Maintaining a small balance offers two remarkable benefits: 1) low balances let you increase your credit rating and 2) you are much more likely to pay off your balance in full and on time.
14. Monitor your monthly remark
Monitoring your monthly statements incessantly helps you check for fraud, take care of a low balance, and stay on a budget. Despite the fact that you have set up an automatic payment, you are still advised to log in and monitor your monthly statements.
These are the tips for people having a look to give a boost to their credit limit and obtain a good deal on the most efficient credit card in India. The credit limit is constant for each credit card and may also be enhanced after a sure time period. These pointers are relevant to all types of credit cards, be it a life-time free credit card, a premier credit card, or a zero annual fee credit card.