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.