{"id":1316,"date":"2019-12-16T11:06:17","date_gmt":"2019-12-16T05:36:17","guid":{"rendered":"http:\/\/blog.budwisefunds.com\/?p=1316"},"modified":"2020-12-07T18:48:10","modified_gmt":"2020-12-07T18:48:10","slug":"credit-card-limit-how-issuing-companies-determine-your-credit-card-limit","status":"publish","type":"post","link":"https:\/\/budwisefunds.com\/blog\/credit-card-limit-how-issuing-companies-determine-your-credit-card-limit\/","title":{"rendered":"Credit Card Limit &#8211; How Issuing Companies Determine Your Credit Card Limit"},"content":{"rendered":"<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">Ever wondered why the credit card limit of your colleagues or friends is higher than yours? Well, there is a reason behind this. In this blog, we are going to discuss some factors that decide your credit card limit.<\/span><\/p>\n<p><script async=\"\" src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script> <ins class=\"adsbygoogle\" style=\"display: block; text-align: center;\" data-ad-layout=\"in-article\" data-ad-format=\"fluid\" data-ad-client=\"ca-pub-6495755798120621\" data-ad-slot=\"6499025866\"><\/ins> <script>\n     (adsbygoogle = window.adsbygoogle || []).push({});\n<\/script><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">Credit limit is the maximum amount or balance available with the credit holder for use without bearing any penalty. <\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">Those who are not aware of their credit card&#8217;s credit limit available to them can check it in their billing statement, or by calling customer service or by logging into your online account.<\/span><\/p>\n<p><span style=\"font-size: 24px;\"><strong>Further Reading: <a href=\"https:\/\/www.mutualfundssahihai.com\/en\/how-can-i-start-investing-mutual-funds\" target=\"_blank\" rel=\"noopener noreferrer\">Mutual Funds Sahi Hai<\/a><\/strong><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">Deciding one&#8217;s credit limit is completely in the hands of credit card issuing bank or company. But how these companies or banks decide your credit limit is a question to be answered. We are taking two scenarios here. In one, the individual is applying for a credit card for the first time and in the second scenario, the individual is applying for another credit card with the same or different issuer.<\/span><span style=\"font-size: 20px; color: #000000;\"><strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong><\/span><\/p>\n<h2><span style=\"font-size: 20px; color: #000000;\"><strong>Applying for credit card for the first time<\/strong><\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">Getting the first credit card can be really very exciting as well as painful for some people. Credit card companies usually do not hesitate to offer credit cards with higher credit limit to individuals with high income, low debt, and existing good credit history (built due to other loans taken by an individual). Even if you don&#8217;t have any credit history but have a higher income then it is more likely that you might get a credit card with a good credit limit.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">But what about those who neither have any credit history nor higher income and inversely have higher debt levels. In such a case, credit card companies may provide you a credit card with low credit limit and even they might deny offering you a credit card altogether.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">Individuals who struggle to get their first credit card may go for secured cards which are offered against fixed deposits for example you may apply for ICICI Bank Instant Platinum Credit Card against a minimum fixed deposit of Rs. 20,000 with ICICI Bank.<\/span><\/p>\n<h2><span style=\"font-size: 20px; color: #000000;\"><strong>Applying for another credit card<\/strong><\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">When you are applying for another credit card then the issuing company will also look for the same above mentioned parameters along with a few other criteria like past payment history\/records. If your past track record is smooth i.e. with no defaults or late payments then it is more likely that you will be approved of a higher credit limit.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">Usually, credit card companies report your credit card activity to the credit bureaus at the end of the billing cycle or at the time of default. Your credit score (commonly known as CIBIL score) reflects everything which provides sufficient evidence to the credit card issuing company to decide your credit limit.<\/span><\/p>\n<p><script async=\"\" src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script> <ins class=\"adsbygoogle\" style=\"display: block; text-align: center;\" data-ad-layout=\"in-article\" data-ad-format=\"fluid\" data-ad-client=\"ca-pub-6495755798120621\" data-ad-slot=\"6499025866\"><\/ins> <script>\n     (adsbygoogle = window.adsbygoogle || []).push({});\n<\/script><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\"><strong>Important thing to note &#8211; <\/strong>Though you can use your credit card all the way up to the credit limit available to you, but it is in the best interest of the credit card holder to keep the credit utilization of their credit cards low i.e. up to 30% of the total credit limit available. If you exhaust the entire credit limit available to you then it shows that you are credit hungry, even if you pay all your dues timely. This problem can be tackled by holding multiple credit cards of different banks or companies.<\/span><\/p>\n<p><span style=\"font-size: 24px;\"><strong>Also Read: <a href=\"https:\/\/budwisefunds.com\/blog\/what-is-dicgc-how-can-it-help-the-fd-holder-in-case-of-bank-default\/\" rel=\"bookmark\">What is DICGC? How can it help the fd holder in case of bank default?<\/a><\/strong><\/span><\/p>\n<h2 style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\"><strong>Does Credit Card\u2019s Credit limit remain the same?<\/strong><\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">The credit limit may not stay the same as it is usually bound to change both on the upward as well as downward side depending on the cardholder&#8217;s payment habits. For instance, if you make use of your credit card cautiously and wisely and make timely payments of your dues then the chances of your credit limit getting increased increases. Whereas on the other hand, your credit limit may be lowered if you use your credit card recklessly and make delayed payments.<\/span><\/p>\n<h3 style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\"><strong>Should you opt for cards with no preset spending limit?<\/strong><\/span><\/h3>\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">Some credit card companies offer credit cards without any credit limit. These cards are usually known as charge cards. And issued with no-preset spending limits and the cardholder has to repay the outstanding balance in full before the due date to avoid any charges. These cards are approved on the basis of your spending habits, debt levels, number of credit cards, credit history, etc.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">But there is a catch. Even though these cards come with no-preset spending limit it doesn\u2019t mean that your spending limit is unlimited.<\/span><\/p>\n<p><script async=\"\" src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script> <ins class=\"adsbygoogle\" style=\"display: block; text-align: center;\" data-ad-layout=\"in-article\" data-ad-format=\"fluid\" data-ad-client=\"ca-pub-6495755798120621\" data-ad-slot=\"6499025866\"><\/ins> <script>\n     (adsbygoogle = window.adsbygoogle || []).push({});\n<\/script><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">To know more about credit cards you may refer our other blogs posted on our website.<\/span><!--StartFragment--><\/p>\n<p><span style=\"font-size: 24px;\"><strong>Further Reading: <a href=\"https:\/\/www.hdfcbank.com\/personal\/resources\/learning-centre\/pay\/benefits-of-credit-card-limit-increase\" target=\"_blank\" rel=\"noopener noreferrer\">HDFC Bank<\/a><\/strong><\/span><\/p>\n<p><img loading=\"lazy\" id=\"hicdyccl\" class=\"size-medium wp-image-562 aligncenter\" src=\"https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/08\/download-pdf-button-1-300x88.png\" alt=\"\" width=\"300\" height=\"88\" srcset=\"https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/08\/download-pdf-button-1-300x88.png 300w, https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/08\/download-pdf-button-1-1024x299.png 1024w, https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/08\/download-pdf-button-1-768x224.png 768w, https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/08\/download-pdf-button-1-1536x449.png 1536w, https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/08\/download-pdf-button-1-2048x598.png 2048w, https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/08\/download-pdf-button-1-1200x350.png 1200w, https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/08\/download-pdf-button-1-1980x578.png 1980w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ever wondered why the credit card limit of your colleagues or friends is higher than yours? Well, there is a reason behind this. In this blog, we are going to&hellip; <\/p>\n","protected":false},"author":1,"featured_media":2094,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[10],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Credit Card Limit - How Issuing Companies Determine Your Credit...<\/title>\n<meta name=\"description\" content=\"Ever wondered why the credit card limit of your colleagues or friends is higher than yours? Well, there is a reason behind this. 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