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Credit Card Enhancement Letter: How to apply for increasing credit limit

By Spider Computech on
Credit Card Limit IncreaseA credit card limit enhancement letter is a formal request to your bank for increasing the credit limit assigned to you. While the approval of such request is a sole decision of the authorities, you can always write a letter to bank manager for increasing credit card limit. Most banks like SBI, HDFC, Axis etc have their own bank credit card limit application form; PDF can be downloaded from their official websites. If there is no pre-formatted credit card enhancement form you have to draft a letter yourself. Let us see how to write one and what do you need to enclose. Keep reading!


How to get credit limit increased on your credit card?


We will begin with a short checklist. If you can tick them off before you write an application letter to increase your credit card limit, chances of approval will be higher. So, what are they?

Did you pay your bills regularly last year?


The most important factor behind a successful credit limit enhancement application is regularity and discipline in paying off credit card debts for at least last six months, if not the whole year. If you have been paying your credit card bills on time for last one year, without any fines or late payment charges, chances are that your credit score (as well as dynamic credit limit) is high or satisfactory. You simply must have a good credit history before you should even think of applying for credit card limit increase: both for a faster approval as well as your own financial health.


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What is your credit utilization level?


As an Indian, you are obviously familiar with a popular etiquette: when you pay someone a visit, do not consume every food they offer. Having some food left on your plate is a good gesture. The same applies for your credit as well. If you eat up all the credit you are offered, your credit score will go down proportionately. For example, if you have a credit limit of fifty thousand rupees on your credit card, and your debt is around forty or forty-five, you have an extremely high credit utilization level. Your debt to limit ratio should be a maximum of twenty to thirty percent; in other words, if you are offered a credit limit of fifty thousand rupees try to keep your debt within ten to fifteen. Sharing your debt between multiple credit cards to lower this ratio may be a good technique, if you can craftily handle them all. Having around ten percent credit utilization level is often a surefire way to get your credit card limit enhancement application approved!


Does your bank have credit card limit increase forms?


Do a quick search on your bank's website whether they offer to download credit card limit enhancement form in PDF or DOC format. If not, visit the branch and ask for a hardcopy. Most banks in India have their own pre-formatted credit card limit enhancement form for download (SBI, HDFC, Axis, ICICI etc.) where you just have to put the relevant information and submit it to the bank. If there is no such form in place, only then you have to write a letter yourself. Here we have provided a sample credit card limit increase letter to bank manager for your reference. However, please note that this is a model credit limit enhancement letter and different banks may require different write-ups; you should always seek advice from the officials regarding this.


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Sample application letter to bank manager for credit card limit enhancement


To
Whom it may concern
NAME OF BANK OR COMPANY
NAME CREDIT CARDS DIVISION
FULL POSTAL ADDRESS

Sub: Request for increasing credit limit on credit card

Sir / Madam,

I have been operating a savings bank account in your esteemed bank since [ACCOUNT OPENING DATE] and also an existing credit card holder for last X YEAR/MONTHS. My [NAME OF THE BANK] credit card number is XXXX-XXXX-XXXX-XXXX and I hereby request for considering an increase in my credit limit.

In consideration thereof, I confirm that my card account is at least six months old and that my previous debts have been paid off on time. I also understand that your bank has absolute authorities to perform a credit bureau check, as well as the right to approve or reject my application for credit card limit enhancement without citing any reason whatsoever.

Enclosed here are the necessary documents for your perusal including self-attested photocopies of my payslips and Income Tax Returns. I confirm that whatever information is furnished is true and complete to the best of my knowledge.

Thanking you,
Yours Sincerely,

YOUR SIGNATURE
(YOUR NAME IN FULL, AS WITH THE BANK)
DATE

Necessary documents for credit card limit enhancement application


Please note that different banks require different set of documents for judging your credibility. As a general guideline, here is a list of common documents required for credit score reconsideration. You are nevertheless advised to contact your bank officials for a proper list of documents to be submitted along with credit limit application letter.

  • If you are a salaried individual, you have to provide adequate proofs of your income like salary slips for last three months or salary certificate, latest stamped Form 16 or Income Tax Return etc.
  • If you are a self-employed professional or a pensioner, the latest stamped Income Tax Return should suffice.
  • Have a bank account statement or photocopy of your bank passbook for last six months ready, in case the officials need them to verify your income and expense patterns.
  • You may required to submit a self-attested photocopy of your PAN card.

A word of caution!


While there may be several valid reasons for you to ask for an increase in the credit limit, you should not use that for your wants but your needs. Surely, this is not a personal finance website and you probably did not like these words of caution, but you should never go overboard. Just because you have been granted a higher credit limit does not make excuses for reckless overspending, because it is you who have to repay the money in future. If you fail to pay on time, the interest makes them worse. Whether you are assigned a higher credit limit or not, swipe your card judiciously to save yourself from low credit scores and an unhealthy financial life.



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