Credit cards can no longer be called a status symbol. In the past, only a handful of people could insert this bank-issued card in his wallet. But today, credit cards are offered to anyone. You can easily see credit card marketers who offer their products everywhere, such as in malls and at exhibitions. In fact, you can apply to increase credit card limits.
But from time to time, the benefits offered by credit cards are no different. Besides having a function as a means of payment, credit cards can also be used as a source of funding. Then, there are two types of limiting or ceiling values that each credit card has. First, the so-called credit card limit. This is the maximum number that can be used by credit card holders for the entire transaction. Start shopping, shop with installments, or withdraw cash. Second, it is usually called the cash withdrawal limit. This value is usually a percentage of the overall limit. Take for example, the credit card limit is IDR 50 million, then the cash withdrawal limit is likely to range from IDR 20 million to IDR 30 million.
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When is the right time to increase credit card limits?
Of course, every debtor has their own taste in using his credit card. There are those who prefer to use credit cards as a means of payment for various transactions, from everyday shopping, paying bills, to shopping for electronic goods or shopping in e-commerce . There are also those who prefer to use credit cards as a source of loans when pressed. Loans from credit cards, for example, are used when family members fall ill.
But keep in mind, whatever the benefits of credit cards in your eyes, their use is limited by the value of the ceiling. If all the transactions that you have done have touched the limit value, then the credit card can no longer be used.
If so, can we increase the credit card limit? The answer can be. You can apply for additional limits to the issuing bank. Your application has the opportunity to get approval from the bank, provided you have a good track record as a debtor. This means, you are never late paying bills while you are a credit card debtor.
But before you rush to ask for additional limits, you should consider the following things:
- How long have you been using a credit card? If you only hold a credit card within a monthly period, you should just accept the limit provided by the bank. Just consider the limit given by the bank, which may not be too high as a limit so that you can “learn” to be a credit card customer.
- Pay attention to your destination In some cases, credit cards are used as the main payment instrument in the pursuit of travel reward points, or sometimes called mileage. If you are a serious mileagehunter , there’s no harm in increasing the credit card limit in accordance with the maximum limit of transactions that you usually spend every month. So, you can optimize the acquisition of mileage , which then you can use to buy plane tickets cheaply or free.
- Notice who your credit card users want to increase the additional credit card limits? If so, first consider who holds the additional credit card. If the credit card is for a partner, you can adjust it according to your partner’s financial needs. But if the additional credit card is for children, it helps you provide a minimum limit. This limit is important to educate your child in valuing money, so it is not wasteful.
- Pay attention to your ability to pay off. This is the most important thing you do before increasing your credit card limit: measure your financial ability to pay off. In evaluating your own abilities, you must be honest so that the facilities offered by credit cards do not make you even in debt.
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Some bank considerations before raising your credit card limit
Now , are you sure that increasing the credit card limit is the right choice? If yes, you need to remember, the bank that issued the credit card also has consideration before granting the limit increase request. What are the factors seen by the bank before approving the application for a limit increase? Check out the following points.
1. Your track record as a debtor
The bank will definitely reject the request to increase the limit, if you have been in arrears. Only debtors who have never been in arrears have a chance to get a limit increase. And, the longer your track record as a debtor who is always paying off on time, the more likely it is that your request for a limit increase will get approval.
2. Your income
Your request to increase the credit card limit will potentially be approved if your current income is higher than it used to be when you first obtained a credit card from a bank. With increased income, it means that your ability to pay off debt is also improving. The simple ratio used by banks is that your credit card limit value does not exceed 30% of your total income.
3. Have your own place to live
In addition to the track record of paying off, the bank also usually scrutinizes your residence. If you have your own place of residence and have long lived in the same address, the bank will assess you as a debtor with a low risk. This means, you have the opportunity to increase credit card limits.
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Have life protection before applying for debt
If you have debt, make sure this debt does not become a disaster for the family left behind if you run the risk of death. One way to ensure the family will not bear the debt even though the breadwinner dies is by buying life insurance. By having life insurance, you don’t need to worry if there is a risk of death before the debt is paid off. Because, the family left behind can use the sum insured (UP) offered by life insurance to cover the debt.
Are you still looking for the right soul protection? If so, there’s no harm in considering Optima’s Life Protection from Cigna Indonesia . Life Protection Optima is a term life insurance that provides protection for the risk of aging both naturally and accidentally. With a 10-year protection period, you only have to pay a five-year premium. The sum insured (UP) that you can get from this product can reach Rp. 20 billion.
Congratulations on increasing credit card limits. Don’t forget to be careful about using non-cash and make sure you are protected.