Frequently asked questions: Credit limit

Credit Limit FAQs

What is credit limit?

Credit limit refers to the total amount that a user may spend while paying for services and products. The type of credit card held as well as an individual’s financial history and family profile determine this figure.

Can I increase my credit limit?

You can request your card-issuing bank to look at the possibility of increasing your credit limit and provide them the reason(s) for the request. For example, a promotion at work, an emergency, plans for a long holiday etc could necessitate a requirement for enhanced credit limits. Most banks do consider such exceptions favourably.

Can I buy durable items on my credit card beyond my spending/ credit limit?

No; you cannot buy any item beyond your credit limit. However, some card companies offer you special facilities on buying durable goods. Please refer to the individual product description section.

How do I upgrade my level of credit card?

credit card companies assign a credit card based on your income level. To upgrade your credit card, you must supply all relevant documentation showing the increase in your income levels. However, your previous credit history will also play a role in this matter.

Will the credit card company give me additional credit limit in the event of an emergency?

Yes. Normally, credit card companies can enhance the limit by 15% to 25% for a period of two months provided your credit history in terms of timely payment is satisfactory.

How do I keep track of my spending on the credit card?

Normally, credit card companies will send you a detailed statement of account on a monthly basis irrespective of the purchases made in any given month. This will help you verify the purchases made by you and maintain personal records.

How should I manage credit?

Prepare and stick to a monthly budget. After listing down ALL the monthly expenses (food, shelter, clothing, entertainment etc) reduce the same from your after-tax income. You can use the difference either to save or to spend on other purchases (on your credit card). You must, however, also budget appropriately for unplanned emergencies of any nature.

What is a credit shield on a credit card?

A credit shield provides a waiver on outstanding amount up to Rs 40,000 in the event of accidental death of the cardholder. This facility is not available on all credit cards.