Plan to increase Credit Card Limit, Know its Advantages and Disadvantages before taking a Decision

Customers who have a good CIBIL score often receive calls or messages from the bank in which they are offered to increase the credit limit. Customers holding credit cards who have a good CIBIL score often receive calls or messages from nearby banks offering them to increase their credit limit. Some people accept these offers and increase their credit limit while some do not increase their credit limit. Today we are telling you what are the advantages and disadvantages of increasing the credit limit.

Benefits of increasing credit limit

1. One advantage of increasing the credit limit is that your credit score can improve. Your credit limit increases only when your CIBIL score is correct and your repayment history is correct.
2. If your credit limit is increased, then you will be able to cope better with difficult times like job loss, illness, accident.
3. There is also an advantage that if you cannot pay the credit card bill by the next due date, you can get your entire bill or part of it converted into EMI.
4. If your credit limit has increased, then you can get more loan against the credit card. However, those who have a good credit history and have made payments on time will get this loan.

Disadvantages of increasing credit limit

1. Perhaps the biggest disadvantage of a large credit limit is that your debt burden may increase. Increasing your credit limit will increase your spending capacity. If you do not use your credit card wisely, you will fall into the debt trap.
2. In case of non-payment of the bill, you will have to pay more interest on the outstanding amount. If your credit limit has increased and you have spent more, then there is a high chance that you will not be able to pay your bill in full. In this case, you will have to pay more interest.

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