Credit card is the solution to many problems. It reduces the need for cash. Also, if you need to go shopping in an emergency or pay some bills, you do not have to beg in front of anyone. Seeing these benefits, increasing the credit card limit can be a tempting option, but you should keep some things in mind.
In the last few years, the trend of using credit cards has increased rapidly. This plastic card is very convenient for everything from shopping to paying bills. But, many times there is a problem of limit while using credit card. Let us know when the credit card limit should be increased and what are its advantages and disadvantages.
When should the limit be increased?
It completely depends on your need. If you have to run around a lot for work, then increasing the credit card limit can be a good decision. This will reduce your dependence on cash. If you do things like shopping, bill payment, airline ticket and hotel booking through credit card, then you can also think about increasing the limit. However, while increasing the limit, you should take special care of the ratio of your income and expenditure.
keep these things in mind
Whenever you think of increasing the credit card limit or you get such an offer, then definitely pay attention to what is the current limit and how much increase is being offered. If the current limit is low and the offer of increase is good, then you can take advantage of it. For example, if the limit is Rs 2 lakh and there is an offer to increase it to Rs 2.5 lakh, then this is a good increase.
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If you increase the limit to more than Rs 5 lakh, then you will not need to keep more credit cards. However, you will have to see your convenience whether you want to keep only one card or more than one.
How to increase the limit?
Sometimes banks allow increasing the credit card limit without additional information and income proof. However, for this you should have a good record of paying your credit card bill. Sometimes banks also look at other things like the ratio of your expenses and income.
At the same time, if you are trying to increase the credit card limit on your own, then the bank may ask you for details like income proof. In such a situation, try to get maximum benefit from the limit.
Keep the cost in mind too
While increasing the credit card limit, you should also think about the cost. Generally, banks do not charge extra for higher credit limit. This is also done on the basis of your income and repayment history. But, if the bank is charging for additional limit, then you should check whether it is right as per the cost or not.
Make your decision like this
Before increasing the credit card limit, you should think carefully whether you really need it or not. It should always be kept in mind that the money on the credit card is a loan, which has to be returned. Many people spend wastefully using credit cards and get caught in the debt trap.
In such a situation, before increasing the credit card limit, all aspects like need, income and expenses should be considered. If you spend more by increasing the limit and are unable to repay it on time, then your credit score will also deteriorate.
