Are you still building your credit history and don’t know how to increase credit limit? You’re not alone. Whether you are a newbie or experienced at using credit cards, keep in mind that a higher limit is usually a boon. Why?
Well, it gives you more purchasing power and helps you tackle unplanned needs with ease. This doesn’t mean, however, that you get your credit limit increased as a way to spend beyond your means. This is a no-no as you need to repay your credit card bill on time or else interest will be levied on the balance.
Think of a higher credit limit like an umbrella on a rainy day. If your credit card company has offered to boost your credit card limit, pay yourself on the back. This means that your responsible behaviour has been noticed, and you are in a position to consider a higher limit.
6 Reasons To Increase Your Credit Card Limit
If you are considering whether to take up the offer of hiking your limit, keep these pointers in mind.
- Boost Purchasing Power
A higher credit limit gives you access to more credit, which means you can make large purchases with ease. Whether you want to spend during a family wedding, do up your home during the festive season, or upgrade your personal electronics during the peak sale season, a higher limit gives you the ability to buy what you need.
- Improve Credit Score
Increasing the card limit will optimise your credit utilization. How? Well, when you have a higher limit and spend the same amount, your utilisation ratio will fall. This way, you can increase your score. If this is your goal, make sure you do not increase your spends when you get a larger credit limit.
- Get A Larger Cushion For Unforeseen Emergencies
Some emergencies, like sudden hospitalization, require huge payments upfront. Here is when a higher credit limit will help you manage the situation. Be it for home repairs, vehicle damage, job loss, or accidents, a high limit can be a boon during times of need.
- Reduce The Number Of Cards In Your Wallet
Keeping a single credit card with a higher credit limit gives you more purchasing power without the hassle of maintaining multiple cards with lower limits. You can easily track your transactions on one card.
This also allows you to save money on annual and joining charges of multiple cards. You can have a higher credit score and a healthy credit history by owning a single credit card with a sufficient limit.
- Access Easy Loans
Loans on cards are linked to your limit and most issuers do not allow you to take
the entire available limit as an advance. Such loans are also not available to all
cardholders but to those who pay bills on time and display responsible behaviour.
With a high limit, you can get a bigger loan amount. It is also likely that you are more
creditworthy as your utilisation ratio is also low.
- Get More Perks
Credit cards with a high limit can give you accelerated reward points, premium savings and memberships to other reward programs. All this can elevate your lifestyle and help you save more in the process.
In addition, you can get an extended warranty and price protection, as well as insurance coverage. All this can add value.
Tips to Increase Your Credit Card Limit
If you want to boost your limit to enjoy the benefits mentioned, you can take these steps.
Improve Your Creditworthiness
Some things you can do to improve your credit score include clearing outstanding debt, paying bills on time and keeping your credit utilisation ratio low. This increases your chances of getting a green light for a higher limit, as you seem more responsible and disciplined with your use of credit.
Make Timely Payments
In terms of repayment, you gain the card issuer’s confidence when you clear your balance in a timely manner. Since your issuer is assured about repayment, you have a better chance of obtaining an enhanced credit limit.
Make a Request for Enhancement
If you are not automatically given an offer for a credit limit, you can personally request an increase from your issuer. You can leverage a good score and higher income by showing proof via:
- Your credit score
- Your credit report
- Your bank statements or salary slips
- Your income via freelancing
Now that you know how to increase credit limit, go for it, but make sure that it doesn’t tempt you to spend more than you can afford. To make managing a credit card easier for yourself, get one of the best credit cards, the One Credit Card today. This metal credit card is not only stylish but has substance too.
Its full-stack One Credit Card App helps you monitor all purchases with ease and helps you set a budget for all types of transactions. This helps you spend confidently every time. You can also enjoy 5X rewards on your top 2 spending categories every month and apply for a higher credit limit with ease on the app. Apply now and get this card instantly.
