Credit card issuers are more likely than not to grant relatively low credit limits to applicants who are “new to credit” and go for Citibank rewards credit card application for their first credit card application.
Later on, when you start using the credit card, issuers will increase the credit limits of existing cardholders if they are confident in their ability to pay their bills on time and to increase their income over time. Although many credit card users would welcome higher credit limits, the fear of getting into a debt trap due to increased Citibank credit card expenditures prevents them from taking advantage of such offers. Such credit cards fail to recognize that it is not the increased credit limit but rather the propensity to spend more than one’s ability to pay back that leads people into a debt trap.
So, here we will discuss the four advantages of increasing your credit card limit on your credit card and also going for a higher limit.
Increases the value of your credit score
The credit utilization ratio (CUR) is the percentage of the overall credit limit you have used up to that point. To calculate your credit score, credit bureaus consider this percentage. Because lenders often perceive applicants with a credit utilization rate (CUR) of more than 30% to be credit hungry and hence more likely to default, credit bureaus will lower your credit score if you surpass this threshold. As a result, ensure to keep checking your credit score. Ensure keeping your Citibank rewards credit card expenditures less than 30% of your overall credit limit, as it becomes critical for establishing or enhancing your credit score over time.
Accepting credit card limit enhancement offers from their existing card issuer(s) will help those who frequently transgress this mark keep their CUR within 30 percent of the target. If your current credit card company refuses to increase your credit card limit, proceed to apply for extra credit card(s) from a different credit card issuer as soon as possible (s). If you do not end up increasing your Citibank credit card spending as a result of obtaining access to a bigger credit limit, you will see a reduction in your CUR as well.
Access to increased financial flexibility to deal with emergencies
A higher credit limit can serve as a source of emergency funds during economic hardship or when faced with financial straits due to unforeseen circumstances such as job loss, severe sickness, or disability.
If your finances are lacking, there’s no doubt your Citibank credit card account is holding you back. Citibank credit cards offer special incentives to help you overcome this handicap by providing the option to convert your broken payments into a monthly installment payment plan that is sustainable and painless simultaneously! A big win for everyone involved.
A more considerable loan amount is available through a loan against a credit card.
A greater credit limit enables you to access more significant loan amounts through a loan against a credit card.
These loans are typically sanctioned against the Citibank rewards credit card holder’s credit limit, allowing you to borrow more money overall. Because they are pre-approved, loan against credit cards is only available to a small group of credit card holders who have demonstrated a history of responsible repayment and spending. The loan disbursement is frequently completed on the same day as the loan application, making them an excellent tool for credit card users to deal with financial difficulties and gaps.
So, check your loan status after the application to know the happenings and have a fair idea about when you can get disbursal.
The credit limit for the Citibank credit card loan was temporarily restricted when you took it out. However, as and when you make payments, your credit limit will gradually return to what it originally was. Some loans against your credit card require terms of 6 months to 60 months and have higher interest rates than a personal loan from the same issuer offered on the same card used during the same period. Also, remember that some issuers may provide a direct loan on your credit cards for you to use the money around your monthly spending needs.
Higher scope of availing EMI offers for big-ticket purchases
It is not uncommon for credit card issuers to provide EMI options for good purchases. If you are seeking such a credit card, it’s essential to make sure that the EMI is interest-free and that the manufacturer or merchant of those goods and services covers the cost of the EMIs. When acquiring goods and services through certain credit cards, most merchants and manufacturers also offer interest-free revolving credit facilities with your issuer to ensure their business continues to flourish.
Buying with EMI is a great way to save significantly while getting exactly what you need. Specific merchants and manufacturers have also begun offering discounts or cashback on particular items and services that can be used as credit when paying for them through a discounted balance transfer program. As a result, maxing out your credit limit will allow you to purchase more items, saving you money by making them much cheaper since they are paid through discount balances transferring payments. And because unpaid credit card EMIs may cause your credit limit to be blocked until they are paid in full, leading to a significant inconvenience, lowering your credit limit will help you spend more money over time by keeping it open for the purchase of regular credit card purchases. You can check your current credit limit from the app or on the banking app.
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