The credit limit is the most you may spend on your credit card at any moment. The credit card company sets the limit. You should try to spend no more than 30% of your credit limit and never go over it. This will guarantee you an excellent credit score.
How Is The Credit Limit Calculated?
The bank determines your maximum credit limit in India when you apply for a credit card. A variety of criteria sets your credit card limit, including-
- Your earnings and age
- History of Credit
- Credit Rating
All of these variables have a significant influence on your credit card limit. Also, if you are applying for your first credit card, you will most likely be given a modest credit limit. However, if you use your card correctly and make your payments in full and on time, the bank will allow you to increase your card’s credit limit.
Total Credit Limit In Relation To Available Credit Limit
Total Credit Limit is the highest credit limit available on your credit card. If you continue to exceed this limit, the bank will charge you a late fee.
The maximum credit limit in India is the amount of credit available for purchases on the stated date.
Assume you have a credit card with a maximum credit limit of Rs.60,000. It signifies that the total amount you may spend with your credit card is Rs.60,000.
Assume you spend Rs. 25,000 in one month. Then your accessible credit card limit will reduce to Rs. 35,000. It should be noted that when you make monthly payments, your credit limit and available credit limit both grow by that amount.
What Percentage Of Your Credit Card Limit May You Use?
Understanding how the maximum credit limit in India works while using a credit card is critical. You may always attempt to increase your credit card limit if you have a low credit limit. However, remember that a higher credit card limit is a chance to improve your credit score, not an opportunity to spend more than you should.
Your credit utilisation ratio considers how much of your available credit limit you typically utilise. If your credit utilisation ratio is abnormal, lenders may hesitate to consider your request, which can harm your credit score and make it difficult for you to obtain a loan in the future.
How Can I Raise My Credit Card Limit?
Banks typically monitor an individual’s credit card usage to determine if a particular cardholder should be granted a greater credit limit. The bank will notify you if you are qualified via your registered cell phone number or email address.
You May Raise Your Credit Limit By Doing The Following:
- Seek a credit limit increase from your bank- You may also request a credit limit increase from your bank. Depending on the rationale you stated, the majority of banks consent to do so. You can make a request via online banking or by visiting your local branch.
- Pay your bills on time- If you make your credit card payments on time, the bank will automatically boost your credit limit.
- Apply for a new credit card-You may also apply for a new credit card with a bigger credit limit than your existing one.
The credit card provider determines your maximum credit card limit in India when you initially apply for a credit card. They will set your credit limit based on your salary and credit history.
The bank issues several top alternatives in the best reward credit card category. You can get cash back, access to lounges, free meals, hotel stays, or business class tickets. The cards offer several perks in eating, golf courses, shopping, travel, and so on.