Like every borrower, you should be concerned about a good credit score and maintain a low credit utilization ratio. A credit cardholder who understands ‘how credit cards work‘ can utilize the available credit prudently without affecting the credit score. Checking credit cards available credit is one of those practices that help to avoid additional penalty charges.
A credit card’s available credit is the difference between the offered credit limit and the outstanding balance on a credit card. This is the amount that the cardholder can spend. If the spending goes beyond this limit, the cardholder has to pay the penalty for exceeding the credit limit or declining the card. Therefore, the user must check the credit card’s available credit before using it for purchases. The card user needs to ensure that there is no over-limit fee.
Importance of Knowing Credit Card Balance
Frequent credit card users should check their card balances at regular intervals as it is beneficial in the following ways:
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Know your outstanding bill
By checking your credit card’s balance, you can come to know the balance outstanding on your card and make a timely payment.
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Know the available credit to decide on expenses
Knowing the credit available on a credit card helps to decide the expenses. Keep an eye on the available balance and determine what financial obligation is essential to meet and when you need the card the most.
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Keep track of transactions.
The cardholder can keep track of transactions made during a specific billing period to be aware of incorrect charges on your credit card. If the user finds an irrelevant charge, incorrect annual fee, credit card interest, or did not get a refund can raise a dispute with the card issuer or merchant. Ensure you know the billing cycle consisting of an introductory rate before raising a dispute for interest rates.
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Ways to Check Credit Card’s Available Limit
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Monthly Bill Statements
After the credit card billing cycle, the credit card issuer generates a monthly statement and sends the card holder’s registered email ID. Cardholders can download it. They can ask for a hard copy of the statement also against a minimal fee. A credit card statement contains all the information, including your credit card balance.
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Through Issuer’s branch
The customer can visit the card issuer’s branch. Generally, first-time card users being extra cautious, visit the issuer branch to check the details of their credit card transactions and balance. The cardholder needs to carry the credit card and identity proof to know the credit card details.
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Through ATM
The card holder can visit the nearest ATM and check the credit card balance. Insert the card into the machine and enter the PIN to authenticate the request.
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Through Net banking
If you are registered to the net banking service, you can check your credit card limit by visiting the bank’s net banking website or application. Log in to your bank account using the credentials and select the credit card for which you want to check the limit. View the credit card limit mentioned in the credit card account summary.
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Through SMS
You can send an SMS to your bank from your registered mobile number. There are keywords in the approved format to instantly get details regarding the credit card limit.
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Through Mobile App
Almost every card issuer company has a designated credit card mobile application. The users can check their credit card limit anywhere and anytime. It helps to understand the credit usage and know the card balance.
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Through Customer Care
A credit card limit can be checked in real-time by calling the bank’s credit card helpline number. They will verify the credit card holder’s details and tell you the credit card limit.
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How Does the Card Issuer Decide the Credit Card Limit
Various factors that the card issuers consider to determine the credit limit include:
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Annual Income
With a higher income, the issuer can offer a better spending limit. If your income is high, it indicates your high capability to pay the credit bill.
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Current debt amount
The issuer considers the amount of money an individual has borrowed in the past and how it has been repaid. It can impact your credit score negatively if you have missed a bill or availed excess credit on the card.
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Credit utilisation ratio
The issuer looks at the credit card limit you have utilized. Maintaining a low credit utilization limit can increase your borrowing limits. At any point in time, the cardholders should maintain a credit utilization ratio of less than 30%.
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Employment Status
If you are employed in a reputed organization for a significant time, your job stability, and regular pay, the issuer can trust you and offer a higher credit limit.
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Credit score
A high credit score indicates a better repayment capacity and past repayment records that increase the chances of getting a higher credit limit.
