Increase Credit Card Limit

Benefits of Increasing Credit Card Limit

Credit Cards have become a crucial part of our life. They can be used for everything right from small purchases to large expenses like vacations and home renovations. As your needs and income grows gradually, you can consider increasing yourCredit Card limit.

While there are potential risks associated with increasing your credit limit, there are also many benefits. In this article we will explore the benefits of increasing Credit Card limit.

What are the benefits of increasing a Credit Card limit?

• Improved credit score: One of the most significant benefits of increasing your Credit Card limit is that it can improve your credit score. Your credit score is calculated based on several factors including your credit utilisation ratio. By increasing your credit limit, you can increase your available credit which can lower your credit utilisation ratio and improve your credit score.

• Increased purchasing power: Another significant benefit of increasing your Credit Card limit is increased purchasing power. This can be especially beneficial in emergencies or for large purchases that may be difficult to pay for all at once.

• Enhanced rewards: Many Credit Cards offer rewards programmes that provide cashback, points or other incentives for using the card. By increasing your credit limit you can take advantage of these rewards programmes more effectively.

• Better financial flexibility: With a higher credit limit you have more options when it comes to making purchases and managing your finances. This can help you to feel more in control of your finances and manage unexpected expenses effectively.

Increasing your Credit Card limit can help you manage your finances better and achieve your financial goals. It is important to use credit responsibly and make sure that you are able to pay off your balance each month to avoid accumulating debt and paying high interest charges.

How the Credit Card Limit works for Multiple and Single Credit Cards

Multiple Credit Cards

• Suppose, Mr. Rohan has 3 Credit Cards

• Credit Limit of Card A is Rs 5 lakh

• Credit Limit of Card B is Rs 3 lakh

• Credit Limit of Card C is Rs 1 lakh

• Maximum expenditure allowed to Mr. Rohan collectively from Card A + Card B + Card C is less than or equal to Rs 5 lakh.

Single Credit Card

• Suppose, Mr. Rohan has 1 Credit Card with a credit limit of Rs 1 lakh

• Maximum expenditure allowed to Mr. Rohan is Rs 1 lakh.