• A sudden blow from the bank!


• Why is credit card limit reduced?


• 'These' mistakes can be costly

Credit Card Limit : The craze of credit card shopping is currently increasing. Many users expect that their credit card limit will increase over time, but if their credit card (Credit Card Limit) If the limit is suddenly reduced, “text-align: justify;”> Income Tax Notice Reasons : Notice of Income Tax despite filing ITR on time? These mistakes can be costly

One important reason for this could be the infrequent use of the card. If you don't use your credit card for months or only use it for occasional small purchases, the bank may assume you don't need such a high credit limit. Banks and card issuing companies periodically audit customer accounts. Due to this process, credit card limits that have not been used for a long time can be reduced.

What happens if it is not paid on time?

Not paying your credit card bill on time can affect your credit limit. If you pay only the minimum amount for several months or have a large balance on your card, the bank may consider you a risky customer. To reduce your risk, the bank may reduce your credit limit.

Banks look at your entire credit profile, not just your credit card. If you've taken out a personal loan, been paying off card installments on time, or taken out a new credit card, this can lower your credit score and affect your credit limit.

Your income also plays an important role. Many banks ask customers to update their income from time to time. If your income has decreased or the bank feels that your ability to repay the loan is not what it used to be, the bank may decide to reduce your credit limit. This is not the case with all customers, but banks are keeping an eye on these things as well.

Sometimes it's not the customer's fault

Sometimes a credit card limit reduction isn't your fault. Banks periodically review all their credit card customers and modify the rules according to their risk profile and business needs. In such cases, even if you have always paid your bills on time, the bank may lower the credit limit for some customers.

Another negative effect a reduced credit limit can have on your credit score. Let's say you spend ₹35,000 per month. Earlier your card limit was ₹200,000, but now the bank has reduced it to ₹70,000. Your spending will remain the same, but your credit utilization ratio will increase significantly, as you will be using a larger portion of your available limit.

If this ratio remains high for a long time, it can negatively affect your credit score. So, if your credit limit goes down, it's important to pay attention to your spending and credit utilization.

Contact customer service

Just because your credit limit is lowered doesn't mean it can't be raised again. If the bank has not informed you about this via email or text message, you can contact the customer service and ask why.

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