Credit card usage has spiked across the globe like never before. This financial instrument is considered easy-to-use, reliable, and convenient, especially by millennials. People use credit cards to balance out income and expense gaps as these allow sufficient time for repayment. Whether it is shopping needs, investment objectives, or even credit score goals, credit cards can come in handy for all this and much more.
HDFC credit cards offer many benefits, and one among those is a reasonable credit limit. Most of your aspirations such as annual holidays, online shopping, convenient utility bill payments, etc, can be fulfilled using an HDFC credit card. A credit limit is the maximum amount that you can spend in a month. The bank can modify your credit limit basis your eligibility, which in turn, is influenced by many factors. Some commonly used criteria for determining credit limit are your income, previously held credit cards, repayment history, etc.
Despite the credit limit assigned on your card, a credit card has to be used judiciously to make the most of the benefits they offer. Another reason to ensure mindful usage of credit cards is that credit bureaus and credit card issuers use these as a primary measure for assessing a user’s credit history. A lot of factors go into determining an individual’s credit score. A good credit score is an important measure of assessing an individual’s eligibility for a credit limit increase. If you have an HDFC credit card and are wondering how to increase the credit limit on it, we have all the answers for you. Read on to find out.
How to check HDFC credit card limit?
As a first step, here is how you can easily check your HDFC credit card limit:
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Using Netbanking
If you have access to HDFC Internet Banking, you must first log in to your account to check your present credit limit. This will appear on the dashboard once you are logged in.
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Using HDFC Mobile App
You can check your credit limit by using the HDFC Mobile App. The credit limit will appear on your dashboard once you log in.
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By sending an SMS
You can send an SMS to ‘5676712’ as per the format defined by the bank which is as below:
CCACL XXXX
Here, ‘XXXX’ is the last 4 digits of your credit card number. Send the SMS using your registered mobile number.
Types of HDFC Credit Card Limits
HDFC credit cards come with three different credit limits. Let’s have a look at each of these:
- Total credit limit – This is the maximum credit limit that you can avail of in your HDFC Credit Card. The limit is automatically reduced by the amount spent on every purchase made through the card. It is restored to the original amount once you make your credit card bill payment.
- Available credit limit – Available credit limit is the amount available as on a specified date. For instance, if you have a total credit limit of Rs.1 lakh on your credit card and you use up Rs. 30,000, then the available credit limit is Rs. 70,000.
- Cash limit – The amount included within your credit limit which is available for cash withdrawals is known as the cash limit. To understand the cash limit better, let’s take an example. Suppose the credit limit of your card is Rs. 3 lakhs. The cash limit will vary between 20%-80% on this amount. If the cash limit is set at 20%, you can withdraw Rs.60,000 as cash through your credit card. It is important to note that cash limits attract interest charges and also cash withdrawal fees, as per the rates fixed by the bank.
Why is it important to increase credit card limit
Every credit card comes with a maximum limit on spending. This could cause a tight financial situation, especially if your expenses have been on a rise. However, instead of applying for a new credit card, you can consider getting your credit limit increased as it can offer many benefits. Let’s understand why it is important to increase credit card limit:
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Better credit scores
When you get a credit limit increased on your card, it can lead to lower credit utilisation provided you maintain your expenses to existing levels or reduce them further. A low credit utilisation reflects the borrower’s responsible credit usage and helps in increasing the credit score.
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No Need to handle multiple credit cards
Instead of applying for and handling multiple cards, you can simply opt for a credit limit increase on your existing credit card. This way, you don’t have to worry about memorising multiple pins or remember all the credit payment cycles. With a single card that has a substantial credit limit, you can easily plan and control your monthly expenses.
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Helps during emergencies
During unexpected expenditures, a higher credit limit on your credit card can be very helpful. This is because you can have easy access to capital through your credit card, especially when there is an enhanced credit limit.
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Better rewards
If you have been regular in using your credit card for various spending and have been paying back regularly, you can earn various rewards associated with the card. This can especially work to your advantage if you have a higher credit limit and use it for big-ticket expenditures.
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Easy access to loans
Your credit card repayment history can play an important role in influencing your credit score. With an improved credit score, you can have easy access to loans from the same bank. While providing loans, lenders often prefer customers who have been using the same card for a long time and have a positive track record with repayment.
Factors Influencing Credit Card Limit
HDFC Bank has a list of criteria based on which it allows different credit limits to different credit card users. Apart from the norms and requirements set by the bank, there are also many factors that have a significant influence on the credit limit for a user. Let’s have a look at some of these:
- Credit history – HDFC Bank considers your credit history while assessing a credit limit increase on your credit card. This is because your credit history shows how creditworthy you are and how well you can manage debt usage.
- Credit score – Another factor that has a direct impact on your credit card limit is your credit score. Credit scores are calculated by different bureaus using various techniques. Some common factors considered in its calculation are credit utilisation, bill repayments, number of loan applications, etc.
- Income – Your income is always considered before granting an additional credit limit on your card. The more income you can show, the higher chances of getting a credit increase.
- Outstanding debt – If you have higher outstanding debt, the chances of getting a credit limit increase are slim. This is because the bank will consider it as a risk to grant you additional credit before you pay off existing debt.
Tips to Increase HDFC Credit Card Limit
A credit card limit is dynamic and can go up or down depending on the factors that we discussed earlier. If you are looking to get a credit limit increase on your HDFC credit card, here are some smart tips that you can employ.
Aim for Higher Credit Score
You can enjoy higher credit limits if you have a higher credit score. Hence, try to improve your credit score. Credit scores can be improved through timely repayments, fewer loans, lower credit utilisation, etc. Remember, consistency is key when it comes to credit scores.
Notify About Financial Status Change
If you have had a recent increase in your income, you must reach out to HDFC bank to inform them about the same. The bank will consider granting a higher credit limit for upgraded financial status. Try showing a consolidated income statement to the bank for a faster credit limit increase.
Request for Card Upgrade
Request the bank for an upgraded card to enjoy a credit limit increase. Ensure that you have a good credit track record and a preferably long-standing relationship with the bank for an easy card upgrade.
Ensure Wise Credit Usage
Your existing credit usage pattern is considered by the bank while verifying a request for a credit limit increase. Ensure judicious credit card usage to be considered eligible for credit card limit increase.
What If You Do Not Get a Card Limit Increase From HDFC?
If you have already applied for a credit limit increase with HDFC Bank, but have been denied the same, here are some important points you should work upon.
- Timely bill payments – As a first step, check if you have paid all the due bills and whether they have been paid on time. Most banks will reject a credit limit increase application if your track record with bill payments has been poor. This will also affect your credit score if you do not take immediate action.
- Judicious usage of credit cards – Your credit report will show the complete picture of how much and how often you use credit cards. If you end up using your credit card for most of your expenses, the bank will conclude that you are credit hungry or do not have sufficient cash earnings to cover your expenses. This could be one reason for the credit limit increase being rejected. As an immediate step in the right direction, try to limit credit usage to only essential spending.
- Improve credit utilization – Continuing the earlier point, try to maintain a credit utilisation of below 50%. This means you must try to use only 50% of the available credit. A lower credit utilisation creates a positive impression with the bank and also improves credit score in the long run.
- A good relationship with the bank – The bank may not easily consider a credit limit increase if you are only a credit cardholder. To improve your relationship with the bank, try to have an alternative account with the bank or simply be in the bank’s good books with your credit behaviour.
End Note
While requesting for a credit limit increase on your HDFC credit card, always be mindful of all the influencing factors and weigh the options before deciding. You can benefit from a credit limit increase if you use your credit card responsibly.
Frequently Asked Questions
How can I request a credit limit increase on my HDFC credit card?
You can request a credit limit increase through net banking or the bank’s app. Alternatively, you can make a request by sending an SMS to 5676712 as ‘CCACL XXXX’. The XXXX stands for the last 4 digits of your credit card number. Ensure to send the SMS only from your registered mobile number.
Is it possible to spend more than the available credit limit?
A credit limit is the maximum amount available to spend on any card. However, some banks and lenders allow users to exceed the credit limit, usually upto 10% of the credit limit. This facility is called ‘over limit option’. It is important to note that using ‘over limit option’ could attract additional charges as per the bank’s terms and conditions.
How does HDFC Bank calculate credit limit?
Most banks consider an individual’s credit score and income to arrive at an appropriate credit limit. Many other factors like repayment history, credit behaviour, number of credit facilities availed, etc, influence an individual’s credit limit.
Will my credit limit increase automatically if I am using an HDFC credit card?
HDFC Bank grants automatic credit limit increase to many of its credit card users. This is usually done as part of the annual increase offered by the bank. However, it depends on the cardholder to accept or deny the credit limit increase.
