Higher Credit Card Limit :
A credit card comes with a fixed limit. This is the maximum amount you can spend in one billing cycle. For example, if your card has a limit of ₹5 lakh, you can spend up to that amount. Once you pay the bill, the limit resets.

Higher Credit Card Limit :
Sometimes, banks offer to increase this limit. This is called a credit limit enhancement. For instance, a bank may raise the limit from ₹5 lakh to ₹6 lakh.

Banks usually give this offer to customers who pay their bills on time. They also check income, age, loans, and repayment history. Some banks review accounts every 6 to 12 months before deciding.

So, should you accept the offer? The answer depends on how you use your card.

When your limit goes up, but your spending stays the same, your credit utilisation ratio falls. This ratio is the share of the credit you use out of the total available. A low ratio, below 30%, is considered good. It shows discipline in using credit. It also improves your credit score.

For example, if your limit is ₹5 lakh and you spend ₹1 lakh, the ratio is 20%. If the bank raises the limit to ₹6 lakh and you still spend ₹1 lakh, the ratio drops to 16.67%. This helps your score.

But a higher limit has risks. Some people may spend more than needed. If you fail to repay on time, the score will fall. Banks also charge high interest and late fees on pending bills. This creates financial stress.

If your ratio is above 30%, it is wise to accept the offer. If it is already low, you may decline. Saying no will not harm your score.

Sometimes banks reduce limits too. They may do this if they see financial stress or weak repayment. A lower limit can push your ratio above 30%, which may hurt your score.

In short, a higher limit is useful if you manage it carefully. Accept it only if you can control your expenses and pay bills in full.

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