Avoid These 5 Credit Card Mistakes To Prevent Limit Reduction
Credit card companies sometimes reduce the credit limits of their customers. This is a common practice among banks, done under specific circumstances. Here’s when and why a bank might lower your credit card limit :
1. Frequent Late Payments
According to the Reserve Bank of India, credit card defaults increased to ₹4,072 crore by March 2023. If you frequently delay paying your credit card dues, the bank considers you a risky customer. They may believe you lack the funds to repay your debt easily and might reduce your credit limit .
2. Carrying Forward Minimum Dues
Many cardholders carry forward their dues by paying only the minimum amount. While this is acceptable occasionally, making it a habit can lead to an ever-increasing debt. This situation can be risky for the credit card company, prompting them to lower your limit.
1. Frequent Late Payments
According to the Reserve Bank of India, credit card defaults increased to ₹4,072 crore by March 2023. If you frequently delay paying your credit card dues, the bank considers you a risky customer. They may believe you lack the funds to repay your debt easily and might reduce your credit limit .
2. Carrying Forward Minimum Dues
Many cardholders carry forward their dues by paying only the minimum amount. While this is acceptable occasionally, making it a habit can lead to an ever-increasing debt. This situation can be risky for the credit card company, prompting them to lower your limit.
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