Since a lack of liquidity can hamper your lifestyle, you may want to know how to increase credit card limit. While there are many ways you can go about this, learn why this is important apart from giving you an increase in purchasing power. The reason why maxing out your card every month is not a good idea is that it affects your credit utilisation ratio. 

This figure, in turn, affects your credit score. With higher utilisation, your credit score dips. You can prevent this by getting a higher limit on your card and using only about 40% of it. 

A higher credit limit can give you access to more money, removing budget restrictions and allowing you to finance both planned and emergency needs. 

How To Increase Credit Card Limit

1. Request The Bank To Increase The Limit 

The issuing bank will heed your request to increase your card’s limit based on an increase in your income. If you have recently received a pay hike, you can apply for a higher credit limit. The ability to repay your dues on time is one of the most critical factors that banks consider while determining the credit limit. So, submitting proof of a higher salary can help you get a better limit in no time.

2. Boost Your Credit Score and Repay Dues On Time 

Your credit card usage directly influences your creditworthiness. Credit bureaus are informed about:

• Your repayment habits when it comes to credit card bills 
• Credit card overdue balance, if any 
• Utilisation of credit from the revolving limit 

So, it is in your best interest to pay bills on time and in full and keep from maxing out your card. 

The best way to go about this is to ensure you use your credit card for all monthly obligations based on a budget. This way, you can pay your bills by the due date and ensure you do not overspend. 

Since your credit card activities are recorded and shared with credit information companies, this behaviour can help you boost your score. With a higher score, you can ask your issuer to give you a higher limit. The issuer is more likely to do so, as a high score indicates that you have experience handling credit and responsible about the repayments. 

3. Reduce Your Financial Obligations 

It is better to get rid of debts and other obligations, as they strain your income and become fixed expenses that you cannot avoid. These may include home loans, personal loans, car loans, business loans, education loans and more. 

The EMIs you pay towards these debts reduce your available income and cash flow. This can also result in credit card companies offering you a lower limit. So, if you have the funds to do so, pay off a loan in full. Use your bonus, sale of assets, or freelance income to do so. Then you can request that your issuer increase your limit. 

4. Apply For A New Card 

The simplest way to raise your credit limit is to apply for a new card with a higher credit limit for your growing requirements. To do this, make sure you are eligible for the card you plan to apply for. Check the issuer’s qualifying criteria online, and only apply if you meet these parameters. 

With two cards, your credit limit automatically increases. This also helps you build a better credit profile, as you can easily avoid using up the full limit of one card. When choosing a new card, look for one that gives you a different set of discounts and benefits. This will help you increase your savings. 

5. Pay Bills On Time, And Even Before Time

Most credit card issuers boost your credit limit once a year to reward you if you have paid bills on time. In fact, paying bills on time can also help you get an increase in your limit faster! By planning your finances carefully and budgeting your credit card expenses beforehand, you can repay earlier than your due date and enjoy this perk. 

Keep an eye on your credit limit and work on enhancing it by trying the strategies above. The right card will make this process easy. For instance, you can check your card limit on the One Credit Card on the go using its powerful app. 

Simply download the One Credit Card App to check this and monitor all your transactions with ease. One of the best credit cards out there, the One Credit Card gives you 5X rewards on your top two categories of expenditure every month. You also get great offers on dining, shopping, entertainment, and travel. Apply online to avail these benefits!