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2 mins Read | 1 Year Ago

Should You Accept a Limit Increase on your Credit Card? | ICICI Bank

Should You Accept a Limit Increase on your Credit Card?


What comes to your mind when you think of increasing your Credit Card limit? The most striking reality is your capacity to spend more. However, spending more is neither the reason why you should increase your limit nor the chief benefit that you will derive.

Here’s outlining all the benefits of increasing the limit on your Credit Card.

1. Lower your Credit Utilisation ratio

The most basic thing you need to understand about Credit Utilisation ratio is that it keeps increasing with the usage of your card for major purchases. As such, if making major purchases using your Credit Card is commonplace for you, then it makes sense to increase your card limit.

2. Improve your credit score

Increasing the Credit Card limit directly correlates with an improvement in your credit score. When you have a higher limit but use very less of it, your debt decreases. With a good credit score, you will find it easier to secure loans. So, if you are planning to get a House Loan or a Car Loan, focus on improving your credit score.

Also, a lender will consider you as a financially responsible individual who handles their income and expenses prudently. As such, it also assures them of getting back their loans and Credit Card bills on time.

3. Better equipped to meet financial emergencies

Emergencies come unannounced and even your savings might not be enough during cash crunches. In such a situation, having a Credit Card with an extended limit can be immensely helpful.

Higher credit limit will provide you ready access to cash to get you out of a financial crunch. You will be better equipped to gather the funds and repay the amount within 45 days of the interest-free repayment period.

4. A better choice than getting a new Credit Card

If you do not want to increase the limit on your Credit Card but have more credit, you will have to get another Credit Card. Now, the issue with getting a new Credit Card is that it shortens the duration of the credit history. You will have a better score with a longer consistent repayment history.

The age of your old and new accounts along with the average age of all the accounts will be considered to calculate the length of the credit history. So, rather than going through the hassle of getting a new Credit Card and shortening your credit history in the process, simply increase the limit of your present Credit Card. Just remember to check the minimum due on a Credit Card when you use or apply for a Credit Card.

Bottom line

Now that you know all the reasons why you should increase the card limit, go ahead and approach your bank. Increase the limit of your ICICI Bank Credit Card and get all the benefits mentioned above. Moreover, you will get assured cashback and Reward Points on every purchase. Get in touch with an ICICI Bank representative to understand to what extent you can increase the credit limit and how it will affect you.


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