How Do Credit Card Companies Determine Credit Limit
Have you at any point pondered the science behind your credit card limit? For what reason truly do individuals of a similar age and same pay get different credit limits? Have you at any point asked why your companion had the option to get a high credit limit while you were endorsed distinctly for a more modest cutoff on the same card? In this article, we walk you through the rudiments of credit limits and shed light on how credit card companies decide as far as possible. We should get everything rolling.
What is a Credit limit?
The credit limit, as the name proposes, is as far as possible set by the credit card company or a bank on a specific credit card. The breaking point is the greatest sum the client can spend utilizing his/her credit card.
For instance, assuming that your bank gives you a credit card with a constraint of Rs.60,000, you can't spend past this sum on a solitary exchange. The credit limit varies based on the type of credit card and is chosen for clients in view of their eligibility.
How do Banks determine the Credit Card Limit?
Your bank determines your credit limit when you apply for a credit card. This is done by taking multiple elements into consideration. These include:
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Your age
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The debts you currently have (home loans, car loans, personal loans, education loans, etc.)
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Your annual income
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Your employment status
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The amount of credit in your name
The credit limit is determined by two major factors.
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Your credit score
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Your credit history
Reference; How Do Credit Card Companies Determine Credit Limit
