By Admin 
In today’s time, credit card is no longer just a plastic card, but it has become an important part of people’s everyday financial needs. Credit card is useful everywhere like online shopping, travel, booking, bill payment or sudden expenses. This is the reason why a large number of people are using it. However, this question definitely comes in the mind of many people that how does someone’s credit card limit reach lakhs of rupees, while someone else gets a limit of only a few thousand. Actually, before deciding the credit card limit, the bank assesses the complete financial profile of the customer. In this, many things like income, job stability, credit score, spending habits and existing loan are considered. On the basis of all these aspects, the bank decides how much credit limit to give to a customer.
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Income and job stability are most important
While deciding the credit card limit, the monthly income and employment conditions of the customer are first considered. Banks try to understand how much a person earns every month and how stable his job or business is. The higher the salary or business income, the less risk the bank feels and accordingly higher credit limit can be given. On the contrary, banks keep the limit lower in case of low income, because they feel more risk in payment.
Credit score also plays a big role
Credit score is considered an indication of the financial credibility of any person. This score depends on whether you have paid your earlier loan or credit card bills on time or not. If a customer has a good credit score, especially 750 or more, then banks consider him trustworthy and the possibility of giving a higher credit limit increases. Whereas in case of bad score, banks keep the limit less. Apart from this, banks also know how much debt the customer already has and how much of his income is going towards repaying the EMI. If a large part of a person’s income is being spent on the installments of the already ongoing loan, then banks avoid taking extra risks and remain cautious in giving higher limits.
Spending habits are also assessed
Credit card issuing banks also try to understand the spending patterns of customers. If a customer uses his card responsibly and makes timely payments, his chances of getting a better credit limit increase. Experts advise that it is better to use only 30 to 40 percent of the total limit of the credit card. This indicates that the customer is controlling his expenses.
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