The credit card limit is an amount authorized by the bank or financial institution for the customer to make purchase in the month and pay the bill the following month.
According to the consumer’s credit analysis, the institution lends an amount and expects them to pay their bill by the due date.
If you did not pay your credit card bill by the due date, interest would be charged daily and can become an issue if you are late paying off the debt.
How do you increase the credit card limit?
After all, how can you safely increase your credit card limit? Below are some tips that you can put into practice if you want to increase your card limit.
1. Keep personal data up to date
Has your salary increased? Then it’s time to update your financial data and report your new income to your bank or credit card provider.
One of the main criteria for the financial institution to increase the credit card limit is the customer’s monthly income.
Therefore, if you have received a salary increase and have not yet informed your credit card provider, the best is to update your data.
The chances of increasing your limit are much greater if your income has also grown.
2. Transfer other limits to credit card
If you use overdraft and have other lines of credit, such as pre-approved loan limits, short-term lines of credit, and others, the ideal is to transfer all installments to your credit card.
You can request a transfer to your credit card online or directly at your bank’s branch.
This will help to increase your card limit because you will concentrate all limits in one place.
This is also a great way to use practically the total limit of your card for the institution to realize that you need more credit limits.
3. Have a credit card with a chequing account
The chances of having the card limit increase approved may be greater if you have a chequing account from the same institution such as HSBC as the card. That’s because you can choose to pay the bill in direct debit, proving that you will pay the bills with the money in the account without delay. HSBC gives you a flexible, all-inclusive chequing account that allows you to bank on your terms. No monthly fees for the first six months, and later when you maintain a $5,000 minimum balance in combined deposits and investments, including chequing, savings, RRSPs, TFSA’s and more. As you can see, having a credit with a chequing account in the same institution has some money saving advantages.
4. Always use the credit card
Let’s assume your credit limit is $500.
Therefore, if you only use $200.00 monthly, the institution will see no reason to increase the limit.
On the other hand, if your expenses are always close to the maximum and you keep your bill payment up to date, it means that you have needed a higher limit and that you can afford it.
This is the main formula for increasing your credit limit, regardless of income. If the bank does not change it automatically, which usually happens, contact the center and ask for a limit review.
In conclusion
Credit is based on the confidence that the customer will pay back what was borrowed.
For this reason, credit card providers tend to offer higher limits for customers who show themselves to be trustworthy.
With that in mind, if you are in the habit of delaying your bill payment or paying only the minimum, your credit risk is greater. And as a result, it will be difficult for you to increase your limit.
The tip, therefore, is to keep your bills up to date.