Your credit card’s credit limit indicates the amount that the issuer allows you to use. This is important because with a high credit limit you can make big-ticket purchases, improve your credit score, avail of a loan in an emergency and capitalise on offers, discounts, and reward points. If you are someone who is prudent with their finances, an enhanced credit limit gives you a greater degree of flexibility and security.
Work on improving your credit score
Credit scores generally range from 300 to 900 and speak of your repayment capabilities according to how you have managed credit in the past. Thus, financiers check your credit score before approving a higher credit limit. While a score of around 700–750 suffices to get a credit card on favourable terms, you may need to improve upon your credit score if you desire a higher limit. Some things you can do to improve your credit score include clearing an outstanding debt and paying bills and EMIs on time.
Maintain a low credit utilisation ratio
Credit utilisation ratio is a representation of the amount of credit you use, as part of your credit limit. As counterintuitive as it may seem, in order to gain a higher credit card limit, you need to keep your total credit utilisation ratio on the lower side. This tells issuers that you are not credit hungry, have enough income, and aren’t heavily dependent on credit on a day-to-day basis.
Use the card regularly and make timely repayments
As a regular user, you become more of a valuable customer to the issuer and hence your request for an increased limit will carry more weight. In terms of repayment, you gain your financier’s confidence when you clear your dues in full in a timely manner. Since your issuer is assured of repayment, you have a better chance of obtaining an enhanced credit limit. Additionally, regular repayments also increase your credit score, which boosts your chances of securing a higher credit limit.