Credit Card Limits!!

[harshitharlalka]

Why is everyone so obsessed with credit card limits?

Everyone easily gets 1-2L limit on any credit card (except SBI ofcourse) and for 99% of the people monthly card spend won't exceed this amount. I'll also assume for someone who needs to spend 2L+ monthly on their credit card, they would have enough salary to get that limit by default.

What am I missing? Except HDFC where higher tier cards get unlocked with CC limit, I don't see the point anywhere else.

 

[nari]

What am I missing? Except HDFC where higher tier cards get unlocked with CC limit, I don't see the point anywhere else.

You already answered your question but few other reasons
1. Large purchases like Gold. I bought 6.5L gold for family members in one transaction.
2. I think it will also help for C2C.

 

[tachniki]

Lower utilization (outstanding on card / current limit) at card level and aggregate level helps in improving CIBIL score. So, if you plan to spend 90k on card, it is better to have 3L credit limit on card to keep utilization below 30% at card level.

 

[harshitharlalka]

Lower utilization (outstanding on card / current limit) at card level and aggregate level helps in improving CIBIL score. So, if you plan to spend 90k on card, it is better to have 3L credit limit on card to keep utilization below 30% at card level.

Makes sense, I totally forgot about this.

 

[harshitharlalka]

You already answered your question but few other reasons
1. Large purchases like Gold. I bought 6.5L gold for family members in one transaction.
2. I think it will also help for C2C.

Is C2C very relevant? Just curious.

I've only utilised C2C once for IDFC Wealth Credit Card, don't even remember seeing C2C option anywhere else.

 

[HumorSimpson]

As gold is already mentioned, one more big spends is edu fee which easily hits 1L in single payments for many and a good limit is needed.

 

[nari]

Is C2C very relevant? Just curious.

I've only utilised C2C once for IDFC Wealth Credit Card, don't even remember seeing C2C option anywhere else.

Not much, it only helped me two times.

 

[nari]

Lower utilization (outstanding on card / current limit) at card level and aggregate level helps in improving CIBIL score. So, if you plan to spend 90k on card, it is better to have 3L credit limit on card to keep utilization below 30% at card level.

This is one of the critical reasons to have higher limits.

But, some banks may consider you over leveraged. I have 1 cr (but actual is 60L and HDFC is the culprit for multi accounts report) aggregated limit of all my cards.