It falls under category of under-utilization of credit facility. Both under and over-utilization is a red flag. It sends signal to bank that person take credit limit but don't utilize it make you a dummy borrower and then new Finstitues (aka Financial Institutes) deny new. They be like, Yeh card lega, use nahi karney wala. Under utilized cards also affect limit for new cards. If old card has history in cibil of 40% use on regular basis like once in a quarter atleast you are utlizing 30% of limit then your new card company/bank will offer you a better credit limit. That's why I said in past, Credit Card are not based on few factors. There are many and every Finstitution check different data for issuing. Some people take Bank CC limits of 1 crore but utilize only 10% of it. They block that money as bank don't know when you will use all of it so it becomes difficult for them to have those funds for under-utlization customers. This also affects their new borrwers. RBI then pushes them to either reduce those limits or ask customer to regularly use it. But as bank know customer won't agree so they left it on their customer's wisdom.
Here most people aren't aware of fact that whenever a bank creates a credit card for you, it is just an unsecured credit limit generated in your name as loan and the bigger a bank credit limit requirement is, they draw or can draw more and more money from RBI by showing their credit book. Whatever money is given to banks by customers, they can't keep it to themselves and have to apply funds via loans, other fin schemes or credit cards. Surplus fund is kept by RBI which gives 4% interest to banks while banks when take this money back from RBI, they get it at 6%. This is called repo and reverse repo. So RBI bhi 2% se kaam chalata hai apna aur customers ko RBI ombudsman ke through paisa baant deta hai woh bhi dubara banks se leke ya unko direct karke.
HDFC faltu mein CC ni baant taa firta bhai. Customers ko credit card chipka ke usko khud withdraw ki power mil jati hai upar se insurance companies ki chaandi jo fraud ke against protection dete hai. Ek credit card, 4-6 departments ke liye benefit deta hai.
Yeh khel aam insaan ki samajh se parey hai. Someone rightly said, "Banks are the biggest legal scams humans ever pulled off."
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