Can raising your credit card limit really improve your creditworthiness? Find out here | Mint

Credit cards have a wealth of benefits, including rewards and cash backs. If used wisely, it helps you manage your expenses and income effectively. But what if you find that the credit card you own is not enough to cover your expenses. You need to make a limit improvement on your credit card if your CUR is more than 30% on a regular basis. For example, if your credit card limit is £ 2 lakh for a cycle and if your monthly credit card account regularly exceeds £ 60,000, you must apply for an improvement. But you need to make sure you have enough income to pay your credit card accounts on time. Here is a guide to improving credit card restrictions, its benefits and who should choose it. Why do you need an increased limit? A higher credit limit can help you manage your finances better and provide you with the ability to make major purchases. Furthermore, it will have a positive impact on CUR, a substantial factor in maintaining a good credit rating. You can opt for a higher limit on your credit card if you have seen a good improvement in your financial fortunes. Lenders usually approve an improved limit for credit card holders with higher income well as they will be able to easily pay off their debt. If your credit card has been responsible for a few years, you can request an increase in the limit. You can do this by signing up to your account online or by calling customer service. You must be prepared to provide information on your income, credit history and the reason to choose a higher limit. What are the benefits of a higher limit? Increase in credit card limit offers several benefits. Here are some of the most important benefits. 1. You don’t have to manage multiple maps: If you get a high credit limit, you don’t have to manage multiple cards. There is no requirement to remember too many PIN numbers, to detect different expenses and credit payment cycles. If all your credit needs are fulfilled by a single card, you can effectively plan, manage and control expenses. 2.. Improved Credit Values: Any increase in credit limit increases your ability to borrow more, which automatically reduces your CUR. Low credit utilization is considered a feature of a responsible borrower and has a great value when it comes to calculating your credit values. A low curly will help you achieve a higher credit rating. 3.. Easier access to loans: If you have a long history of in time credit card payments, you can get a higher credit limit. If you have a high credit limit, the chances of getting loans at lower interest rates are increasing significantly as borrowers consider it a sign of responsible loans. “A combination of high credit limit and a low credit utilization rate is seen favorably by banks, making it easier to be approved for loans,” Bank of Baroda said in its explanator about the benefits of increasing credit limit in credit cards. 4. Useful in emergencies: A higher credit limit is very useful when it comes to managing unprecedented emergencies or unplanned expenses. Unlike other loans, a credit card immediately offers you money, which is useful in navigating sudden emergencies. 5. Better rewards: A credit card with a higher credit limit brings you better rewards. The conversion of reward points into either cashbacks or other benefits is usually more in credit cards with a higher credit limit compared to those with a lower limit. You can benefit from more significant benefits and cashback offers on your improved limit. How can you increase the credit limit? You should contact your card -reaching bank for an increase in the credit limit. Most banks allow you to do this online. You can log in to your credit card account via your bank’s online portal, by browsing the credit limit increase section and follow the instructions. You can also contact the customer service or visit your branch and request an increase in the credit limit. You must provide updated financial information that includes the proof of income. You need to show that you were a responsible credit card user to improve your chances of getting a higher limit. The bank will review your request and if you meet the eligibility criteria, your limit will be increased. Sometimes banks may not be aware of changes in your financial status that make you eligible for a higher credit card limit. You could have received a substantial salary increase. But you may still use your old credit card with a lower limit. In such cases, you can ask the bank to increase the limit. “If your salary has increased, you must submit this information to your credit card issuer with new salary strips or bank statements. A higher income often leads to a higher credit limit as it indicates an improved repayment capacity,” Yes Bank said in its tips for raising credit limit. Banks also offer you the chance to improve the limit after you revise spending habits and repayment history. For this, it is not necessary to provide any documentation or other information. Increasing your credit card limit is an important financial decision. While it can help you manage your finances, you must assess spending habits and possible risks associated with it before applying a higher limit. Allirajan M is a journalist with more than two decades of experience. He works with various leading media organizations in the country and has been writing mutual funds for almost 16 years. First published: 15 Apr 2025, 11:18 am Ist